Valley median existing home price rises again

The latest Arizona State University-Repeat Sales Index shows the Valley’s median existing home price increased for the seventh straight month, reaching $130,000 in September compared to $126,500 in August.
The report shows Valley home prices fell 23 percent from September 2008 to September 2009, down slightly from the 25 percent decline from August to August and the 28 percent drop from July to July. Preliminary estimates for October and November have prices declining at 20 percent and 17 percent, respectively.
“The median price continues to move up. It’s actually up 15 percent from the low in April ($117,500),” said Karl Guntermann, a real estate professor in the W.P. Carey School of Business at ASU. “That’s good appreciation, but things are so bad that you’re just recovering some of the loss.”
Among cities, Chandler fell 16 percent from September to September, while Gilbert fell 15.2 percent. All other regions except Sun City/Sun City West, down 13.6 percent, showed larger declines. Mesa was down 25.7 percent.
From August to September, the average price remained flat in Chandler, and increased 1 percent in Gilbert and .1 percent in Mesa. The Valley median price is expected to hit $131,000 in October and $135,000 in November.
The index measures changes in average Valley home prices from year to year. Guntermann expects the index to turn positive by mid-2010 if the economy continues to get better.
“We’re still hearing things about all the foreclosures that will occur,” he said. “The banks control when they foreclose and when they put those (houses) on the market, so it’s far from a normal market.”
The index started dropping in March 2007 and has continued to show a decline for a record 31 months in a row. However, the index has been falling at a progressively slower rate since March 2009.
Also, while the lower end of the market has been hit much harder than the higher end, the difference between the rates of decline has gotten narrower. Lower-priced Valley homes are down 59 percent since the price peak in mid-2006. Higher-priced homes are down 38 percent from the peak.
“Going into next year, I see the same pattern,” Guntermann said.