Is now a good time to buy Phoenix real estate?

That depends on why you're buying.

In general, the answer is "yes;" all over the country, it's more or less a buyer's market. Home prices in many (but not all) areas have dropped - sometimes only to a slight degree, in others quite dramatically - and houses are remaining on the market substantially longer than they were in 2005.

It should be understood however that any housing market - especially in a nation as large and diverse as the U.S. - is strongly influenced and affected by local conditions. In regions of the country that people are leaving, where formerly good union jobs have moved overseas, the market may never recover. Other areas - to which people are coming, and which have a solid local economy - are seeing housing markets that have held up much better, and even seen some improvements.

The Phoenix metro area has seen some hicups. Thanks largely to the presence of two major universities, an operational Air Force base, a growing film industry and the fact that it is rapidly becoming a major tourist destination (over 3 million vacationers per year!), the local economy is doing quite well, and is expected to continue to do so. Job growth and population is expected to increase substantially over the next twenty to thirty years.

That is not to say that the Phoenix housing market has been unaffected; home values in some neighborhoods have declined, particularly in neighborhoods on the fringes of the Valley, or near the downtown area. On the other hand, central Phoenix and north Scottsdale home prices have remained fairly steady; in some cases, these homes have even continued to increase in value, although these increases have not been nearly as dramatic as were seen during the 2005 boom. Despite slight dips in values, Phoenix home prices across the board are still over $20,000 more than they were two years ago.

Nonetheless, for the time being, houses are staying on the market longer, meaning that buyers are more likely able to negotiate lower prices for the homes they want.

If you are planning to move to Phoenix and become a contributing long-term member of the community, the answer is yes - now is definitely a great time to buy a home in Phoenix.

Short-term investors seeking quick profits are out of luck in most cases. Another boom market in which prices are going up every week is unlikely to happen anytime soon, and in fact, some municipalities have passed laws requiring homebuyers to remain in the house for a minimum period of time (i.e., six months to a year) before reselling it in order to discourage this type of speculative real estate "flipping."

A home is not just a financial investment - it's a place to live, to raise a family and to which one can retreat from the world. Those seeking such a retreat for the long term will do very well in the current Phoenix market.