I don’t really like to do two posts in a row about market statistics -- because it just feels too wonky. But a recent news article about a possible light at the end of the tunnel forces me to do two statistics blogs in a row. The day before yesterday, I wrote about what home sales volumes and prices did in June compared to May. Sales volumes and prices were up month-over-month -- good news, of course.
More good news came in the Arizona Republic this morning as ASU real estate Professor Karl Guntermann said that we may be at or near the bottom. When the folks in the “Ivory Tower” say we’re at or near the bottom, I really listen (they have a good view from up there!).
Guntermann told the Republic that the rate of decline in housing prices has begun to level off since May. “While the housing market is still quite volatile, it may turn out that the low point in terms of price was in May,” he said. Housing prices in Metro Phoenix were still down significantly in May and June compared to May and June 2008, but they were down less than in April.
There is no doubt that housing prices in the Phoenix area will rebound, and eventually return to some trend level (where prices increase, maybe 5 or 8% a year). You can see in the chart below, from ASU, the huge price bubble when we shot up from the trend line, and the huge bust afterward. As the market continues to equalize, that trend line will change of course, but expecting 5-10% appreciation a year is reasonable.
Source: ASU W.P. Carey School of Business; Center for Real Estate Theory and Practice
Data Provided by Ion Data Express
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