Home prices expected to fall in Phoenix in 2012
According to the latest report from the Fiserv Case-Shiller Indexes, homes in the Phoenix-metro area will decrease in value by 11.1 percent in 2012. This drastic decline may make it a good time for first-time homebuyers to purchase one of the houses for sale in Phoenix.
Home sales dropped in March 2012 by comparison to one year ago. Market experts at DataQuick are attributing the decrease in sales to the dwindling number of distressed properties and homes listed under $100,000 on the market in Phoenix. However, as the predicted decrease in values become apparent, sales figures will pick up.
"The precipitous drop in home prices was an immediate cause of the last recession and the financial crisis. Falling home equity has cut into household consumption and has further constrained the economic recovery. However, very low prices have also started to draw in more buyers. As demand for houses ramps up, construction activity will increase and residential investment will begin to make a substantial contribution to the recovery and GDP overall," said David Stiff, chief economist at Fiserv.
The greater Phoenix-metro housing market may experience volatile ups and downs as the inventory declines may drag the number of sales down, until prices start falling as well.
Total home sales in March 2012 were 4.1 percent short of the average number traditionally sold that month. In addition, the share of homes that sold for less than $100,000 fell 16.2 percent from a year earlier. However, the sale of properties on the MLS listings in Phoenix between $100,000 and $200,000 increased 15.3 percent, DataQuick reports.
While the sale of homes between more expensive brackets has increased, the March median was still significantly lower by 48.5 percent than the all-time peak of $264,100 it reached in June 2006. The March 2012 median price paid for the resale of a single-family detached house was $135,000.
Regardless of recent upticks in prices, experts are predicting property prices will decrease over the course of the year. Potential first-time homebuyers can consider waiting for the Phoenix market to show a steady decrease in property prices listed under $100,000 if they are in search of a great deal.