Home prices are surging in metro Phoenix, climbing 8% in March alone and 20% in the past 12 months. The median price of a house in the region climbed to $134,900 according to a new report from the W.P. Carey School of Business at ASU. The trend is projected to continue throughout the year, although at a slower pace.
Mike Orr, director of the Center for Real Estate Theory at ASU, doesn’t expect home prices to continue to climb as fast as they did in March over the new few months, but he projects metro Phoenix’s housing appreciation for 2012 to reach 25% by September. Orr credits the turnaround to steep drops in foreclosures and in the number of homes for sale, coupled with an increase in sales.
Fewer foreclosures mean fewer inexpensive homes for buyers. The number of homes taken back by lenders in metro Phoenix is down 60% from March 2011. Housing inventory has dropped steadily during the past year because of a record number of investors snapping up properties out of foreclosure.
“Prices have begun to rise at a fast pace, and bargains are no longer plentiful,” Orr said. “Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price.”
March’s price increase was the sixth in a row for Phoenix’s housing market. Most real estate analysts say the streak of rising home prices, along with slower foreclosures, is proof a housing recovery is under way. A growing number of national real estate analysts say metro Phoenix is leading the U.S. housing market’s recovery.
The number of houses on the market across the Phoenix area is down 64% from March 2011. “The very low number of inexpensive homes available for resale means more buyers are considering purchasing new homes as an option,” Orr says. “This signals the start of a distinct upward trend in new-home sales.”