Big home price increases aren’t expected to continue in most parts of metro Phoenix this year, and some neighborhoods might see a dip in values.
“We are seeing a big drop in demand compared with the last two years, and there are ominous indications of a softening market when we dig deep into the numbers,” said Mike Orr, director of the Center for Real Estate Theory and Practice at the Carey School.
He cited evidence of the market’s softening: Sales of single-family homes were down 17 percent in December 2013 compared with the year before.
The median price for a Phoenix-area home climbed to $205,000 in December 2013, a 25 percent jump from the same month in 2013. The median was $200,000 in November, so the month-over-month increase was 2.5 percent.
Home prices are up almost 75 percent from the real estate crash low point in August 2011.
Metro Phoenix’s housing market continues to shift toward giving regular buyers a better advantage as the number of investors drops and homes for sale climbs. The number of houses on the market was up in 35 percent in January compared with year ago.
“Overall, buyers are enjoying less competition in bids for homes, but sellers should be prepared for possible cuts in asking price,” Orr said.
About 19 percent of houses sold in December went to investors, down from a record 40 percent in July 2012.
“We’re seeing growing evidence the housing slowdown is also being experienced in other parts of the country, including southern California,” Orr said.
“If current conditions persist in the Phoenix area for several months, downward pressure on pricing will become hard to resist.”
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