Metro Phoenix’s median home-sales price climbed to $175,000 in March, a 3 percent increase from February, according to Arizona State University’s report released Friday.
Home prices have climbed 30 percent in the past year and are expected to keep climbing until at least June. January to June is considered the peak buying season in the Phoenix area.
Prices have not yet risen high enough to entice a larger number of the region’s homeowners to sell. More sellers could help balance the market. The number of houses listed for sale is down 8 percent from a year ago.
“The number of active single-family listings has been dropping fast and went down another 4 percent in March,” said Mike Orr, director of the Center for Real Estate Theory at ASU’s W. P. Carey School of Business. “Fewer than 12,000 single-family homes were up for sale on April 1.”
He said 80 percent of the houses for sale are priced above $150,000, making it tough to for both regular buyers and investors to find affordable homes.
But Orr said most houses priced below $600,000 continue to attract multiple offers.
Some housing market watchers are concerned that home-sales prices are climbing too fast. However, the region’s median sales price is still well off the peak price of $267,000 from mid-2006.
The Valley’s rising housing prices have deterred some investors, who can now find better bargains in other parts of the country. About 27 percent of all houses purchased in March went to investors, the lowest level in several years, according to Orr’s report.
“The low number of sellers is what’s unusual, not the number of buyers, which is only slightly above normal,” he said. “Higher prices would normally encourage more ordinary home sellers into the market, but many are either locked into their homes because of negative equity, or they’re simply waiting for prices to go up more.”
Demand from buyers is expected to keep increasing this year because of population growth. Metro Phoenix is on track to add 50,000 to 60,000 new residents this year.
New-home sales have climbed 37 percent in the past year, but Orr said that’s not enough to meet the demand for housing.
“The population is growing much faster than the housing supply,” he said. “Builders are scratching their heads, trying to figure out what to do. They don’t want to overbuild like they did during the peak, and they don’t want to build a bunch of new homes for people who can’t secure the mortgages needed to buy them.”
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