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Despite competition from a huge number of homes for sale in the Phoenix area, real estate expert Jay Butler told Tempe business leaders Thursday that prices remain above the national average.
"The market is about where it should be and people don't like to hear that," the director of
Realty Studies at Arizona State University said at the Tempe Chamber of Commerce Hot Topics and Lunch.
The median price of a home in the Phoenix area used to be about 90 percent of the National
Association of Realtors' national median price, he said. Prices began rising during a hot housing market in early 2005, and over the past year and a half have settled at about
$260,000. The national median is $219,000.
Although the inventory of homes for sale has climbed to about 51,000, the Phoenix area
remains one of the top 20 metro areas for median prices. It used to be ranked in the 50s,
Butler said.
That doesn't mean there aren't problems.
Buyers can't afford as much because of the higher prices and because skittish lenders have
been tightening their guidelines. Sellers won't or can't lower prices because they owe too
much. And buyers are having problems selling their own homes.
"The problem is a lot of people say this is a buyers market, but most buyers first have to be sellers," he said.
Butler also said the economy and housing market face a number of risks, such as unexpected
geopolitical events and higher interest rates. As for the rising number of foreclosures, he said it is too early to know if they will affect the economy and housing market because it depends whether they will be sold or repossessed.
In Tempe, where he has lived in the same home for 35 years, Butler said the big issue is that
the houses are getting old and not necessarily being well maintained. There are many rental properties and sometimes amateur landlords let them get run down, Butler said.
"I think Tempe is holding its value a lot better than other communities, but the aging of the
housing stock is going to be a big issue," he said. "What concerns me more is homes not
being well maintained. And there's a certain amount of indifference. Everybody wants to save
a neighborhood once it gets into trouble. But no one wants to save it before it gets into trouble."
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