Phoenix-area home prices fell for the first time since March, according to a report released Wednesday from the W. P. Carey School of Business.
ASU real estate professor Karl Guntermann, who writes the monthly report, said this decrease should not be perceived as a trend.
Housing prices had been declining month after month for almost three years, he said, but then increased in March.
The index is calculated by comparing the current sales prices of Phoenix-area homes to prices in the same month of the previous year. The recent report compared home sales prices for August 2010 to prices of August 2009.
“We’ve reached relative stability overall in the housing market,” Guntermann said.
Gunterman and graduate student Adam Nowak compile rates of change for home prices into an index, called the Repeat Sales Index.
The monthly report is the annual change in the index, and while this report does show a decline, Guntermann said it’s hard to draw broader conclusions.
“Yeah, they’re down, but that’s a relatively small decline and it’s hard to see if this is a blip or if this is the start of a new trend of decline,” Guntermann said.
Social work senior Christine Shall and her family rent a house in central Phoenix, and both she and her husband are glad they’re renting, she said.
“When we were really ready to buy was when the housing prices began dropping,” Shall said, adding they were lucky they didn’t buy in 2006, before housing prices fell dramatically.
A graph in the report showed median single-family house prices in the Phoenix metro area had stopped climbing by 2006 and were somewhat even, but then began to fall between 2007 and 2008.
Buying a home when the market is volatile can mean paying a higher price than what it may be worth in a few months. This can result in paying a mortgage on a home that is more than it’s actually worth.
“We were ready to pay $200,000 for the house we were renting,” Shall said of the home they no longer live in. “Now it’s worth $100,000 and just sitting there.”
She said while her family is not considering a big home purchase right now, it does seem like the best time to buy even considering this recent report that shows a drop in home prices.
“I’m not that concerned with the short-term,” Shall said, referring to the stability of the housing market.
She said when she is ready to buy a home sometime in the next three or more years, she’s going to look for long-term stability in the market.
Nursing senior Travis Waschek rents in Tempe and said any changes in the housing market affects the amount of people renting, which is an option many students turn to for affordability.
“When you see any sort of drop in market prices, people are going to be more likely to rent,” he said.
He said when he starts looking at buying a home in the next one to two years, his choice won’t be greatly affected by month-to-month changes in the market.
“It’s better to look at the long-term projections,” Waschek said.
Reach the reporter at ymgonzal@asu.edu
