September slow for home resales
September slow for home resales
Median price lower than last year's for 1st time in decade
Glen Creno
The Arizona Republic
Oct. 11, 2006 12:00 AM
The Valley's resale housing market continued to slow in September as the market struggled to find a bottom.
The number of houses sold fell and, for the first time in a decade, the median price was down from the same time last year, according to the latest resale report by the Arizona Real Estate Center at Arizona State University Polytechnic.
The price drop rattles one of the fundamental assumptions of Phoenix housing: Buy a home and it will probably be worth more next year. It's another reason for skittish buyers to stay on the sidelines.
"The problem gets to be what is the incentive to move into the market?" said Jay Butler, head of the real estate center.
It's also bad news for people who bought at the peak of the market who are finding their houses no longer are worth what they paid. People who need to sell now because of a relocation or other non-negotiable reasons could lose thousands of dollars on their housing investments.
Scottsdale residents Kyle and Jaci Olsen are seeing that phenomenon firsthand. They bought two investment homes in Scottsdale last year, and one has been on the market for 10 months. They paid $415,000 for it and dropped in $40,000 to $50,000 in renovations. Now, it's now listed for $435,000 after coming to market at $499,000.
The couple will list the other house this weekend. Kyle Olson expects it to fare better because they spent $45,000 to completely remodel it, something they hope sets it apart from other resales that have had only the requisite touching up. They bought the house for $430,000 and will try to sell it for $529,000. They originally hoped to get $599,000. "That's how much the market has come down," Kyle Olsen said.
Analysts say one of Phoenix's chief housing problems, other than affordability, is the glut of new and resale homes on the market.
Sexton said it's pointless for sellers to obsess over last year's prices. They're not going to get them.
"Comparing to last year, you're setting yourself up to find a six-story building to jump from," he said. "You can't be too greedy."