The Sun Cities, like other active adult communities in the Valley, are experiencing relatively modest annual gains in housing prices, a new survey reveals.
“Most areas are showing double-digit percentage increases, but those with a preponderance of more-expensive homes or those with large active adult communities are showing relatively modest annual gains in average price per square foot,” according to the report from the W.P. Carey School of Business at Arizona State University.
For example, the price per square foot in Sun City is up 10 percent from September 2011 to September 2012. The increase in Sun City West was 1 percent and Sun Lakes, a retirement community in the southern part of Maricopa County, saw a 3 percent rise in square-foot prices. Similarly, prices in Scottsdale, Fountain Hills and Paradise Valley were up 9, 13 and 11 percent, respectively, the study shows.
Compare that with other West Valley communities: Prices in Youngtown and El Mirage were up 45 percent and 42 percent, respectively.
“The largest increases are seen in areas which last year had a strong supply of foreclosed homes but are now attracting a lot of investors,” the report stated.
Valleywide home prices stabilized from August to September, according to the report.
• The median single-family home price stayed at $150,000 from August to September, but prices are expected to start rising again this fall.
• The overall supply of houses for sale in the market is finally going up — already 24 percent over just the past three months.
• Big investors are showing less interest in the market, as the bargains here become tougher to find and some other cities’ housing markets become more attractive.
“Prices are firming here as we enter the season when Snowbirds return to the Valley,” said Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Now that cooler weather has returned and the normal summer lull is over, prices are resuming their advance with greater speed, though on weaker sales volumes.”
In addition, new single-family home sales rose more modestly in September than in earlier months. In the West Valley, 55 new homes were sold in Peoria, 38 in Surprise and 28 in Glendale.
As for those who worry about another bursting housing bubble, Orr said: “This market is relatively well behaved. Investors are risking their own money, rather than borrowed funds, so risk is being more carefully managed than in the previous boom. Also, ordinary homebuyers drawn into the market now are less likely to regret their actions than those who did so in 2005 and 2006.”