Home sales in 2008 will be the worst in a decade – and that is not adjusting for the population growth during that time. Nationwide, the government figures show that home sales declined 8.9% from October to November, and November was down 17% compared to that same month in 2007. The median sales price in the United States also plunged 13% to $181,300.00, the largest decline since record keeping started 40 years ago. December figures will be out later this month.
Locally, in October home prices in Phoenix dropped 33% according to the Standard & Poor’s/Case-Shiller 20 city housing index. The S&P/C-S index also averages a number of cities. 20 city index fell 18%, and the 10 city 19.1%, both records for the 21 year history of this reporting. Both indices have recorded year over year declines for 22 straight months. Prices have reached March 2004 levels. The Standard & Poor’s/Case-Shiller index can be found at www.standardandpoors.com/portal /site/sp/en/us/page.topic/indices_csmahp.
The good news is the low interest rates, which with the sales price adjustment, has resulted in our local market being affordable again. The “irrational exuberance” of the listing and sales price explosion era has been replaced by the current much needed adjustment period of lower sale prices.
Finally, buyers that were frozen out of our prior market can purchase a home in the Phoenix area. There has been encouraging growth in the under $200,000.00 price range, and increasing participation by international investors looking for that warm weather second home. Besides those buyers, our brokerage is also representing former renters who now are able to afford a home in the area they wanted.
Timeless advice, usually applied to the stock market, is to sell high, buy low. Low home prices and low interest rates means this is the time to buy a home. Other excellent market advice is to buy without trying to time the bottom, because any short term decline will be erased by subsequent increases. The Scottsdale area in particular will always have strong appeal and appreciation, so don’t wait on the sidelines in a vain attempt to get the perfect deal. Buy now, because as always, the best selection goes first!
– N. Mark Kramoltz © 2015