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Is the Phoenix Real Estate Market Crashing?

Is the Phoenix Real Estate Market Crashing?

It is likely that by now, you have heard a great deal about the “crash” in the housing market. Suddenly, all over the country, home values are in decline; foreclosures are up; lenders are facing bankruptcy, existing homes are sitting on the market for months, and applications for building permits are down. Everywhere you look, prospects for the housing market are grim.

Or are they…?

The facts are never as clear-cut or as dramatic as the media tends to present them. When seeking information on anything – whether its about political candidates, Wall Street, the housing market or even the weather, it’s good to keep in mind that news stories are not the best barometer for ecomonic performance. For the hard facts on anything, many people turn to Internet sources today – including the real news about the housing market.

Keep in mind that with very few exceptions, all housing markets are local. What is true about Los Angeles or Denver is not necessarily true about Phoenix. That said, here are the facts regarding the Phoenix housing market: Yes, Phoenix home values are slightly below what they were in 2006. However, on the average these prices are still some $20,000 above where they stood in 2005. In addition, home values have gone down more in some areas of the metro region than others, and are actually still on the rise in some places. In general, home values have held steady or risen slightly in central Phoenix and north Scottsdale; those in downtown neighborhoods or in Glendale tended to remain flat or fallen.

The general wisdom is that it is a very good time for home buyers planning on living in their homes for five years or longer. It is not a good time to pick up a few investment properties then attempt to “flip” them for a quick profit; indeed, it is this kind of speculation that in part artificially fueled the dramatic home price increases seen in 2005. Chances are that we won’t see that kind of market for a long time. While current market conditions definitely favor the buyer, one should plan on holding on to the property for the medium term when seeking to purchase a Phoenix condo or single family home.

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