Sun shines on Valley housing market
It’s all blue skies and sunshine in the housing market this year.
Homeowners have seen their property values soar. Because investors have pulled back on purchases after pushing up prices last year, more regular homebuyers finally are able to unload their moving trucks.
Mercifully for regular sellers and buyers, the market has calmed, giving off a less frenzied vibe than in the 2004-06 boom, the five years of the crash and during the early recovery that began in 2012. Now, more houses are for sale to meet the demand of prospetive buyers and interest rates are low. To top off the sunny picture, houses are still affordable.
The Valley’s median sales price has climbed 30 percent so far this year, and values are up in every neighborhood across metro Phoenix in 2013, according to The Arizona Republic’s latest Valley Home Values report.
Most areas have experienced double-digit increases in home prices so far this year, and a few parts of the region have seen values return to boom levels. Many areas of the Valley with the most affordable houses continue to see the biggest percentage increases, according to The Republic’s analysis of sales information provided by real-estate-data firm Information Market.
That rise in value brings the percentage of underwater homeowners, with mortgages exceeding their house’s value, down to about one of every four in metro Phoenix, compared with nearly one of every two in the same period in 2012.
A growing balance has contributed to the kinder, gentler, more peaceful market.
“Although demand still exceeds supply, they are fast moving toward each other,” said Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University’s W.P. Carey School of Business.
During the first nine months of the year, home sales have been a bit off last year’s pace. The huge drop in the number of foreclosures and short sales for investors to purchase cheaply is behind the overall drop.
“The number of homes for sale is up and will keep climbing,” said Robyne Roveccio, a real-estate agent with Keller Williams Scottsdale office. “The market is better for sellers if they don’t have too high of expectations. It could be a buyer’s market as soon as early next year.”
Orr said house prices are likely to keep climbing, but “at a less furious pace than the last two years.”
Prices and increases vary greatly in different areas of the region. Most homeowners living in ZIP codes across central and north Phoenix saw their home values climb by at least 20 percent so far this year, but prices increased by double that in some areas.
“We knew prices have been rising, but we were still able to negotiate,” said Deborah Webster, who with her husband, Scott, moved from Syracuse, N.Y., and purchased a Tempe house in June. “We wanted to be near Scott’s job at ASU and frankly expected to pay more.”
The couple sold a home in Syracuse to relocate and recently used part of the proceeds to buy a second house in Tempe to rent out.
“The housing market is stabilizing because there’s more inventory,” said Nick Bastian of Realty Executives. “Early this year, people were starting to freak out a bit because the prices were climbing so fast. Now, I feel like there’s a better balance in the market between buyers and sellers.”
Here’s a closer look at home values by region:
The Valley neighborhood with the biggest increase in values this year is in south Phoenix. In ZIP code 85040, the median price climbed 52.8 percent to reach $76,500 in September.
In ZIP code 85051, west of Interstate 17 and north of Glendale Road, the median price climbed 45.9 percent to $116,550.
Across ZIP code 85006, where less expensive historical houses can be found, the median price jumped 43.8 percent to $115,000. In ZIP code 85020, west of Arizona 51 and north of Glendale Avenue, the median sales price increased 40.7 percent to $190,000.
The highest median price in Phoenix is in the north-central neighborhood ZIP code 85012, where the typical house is selling for $392,000. The Valley’s least expensive houses can be found in the downtown neighborhood 85009, where the median price is $52,000.
The western part of metro Phoenix has long been a more affordable option for buyers. But in recent years, as more people have moved to the region, the properties available have become more diverse with both affordable and high-end communities.
In the southwest Valley, Laveen ZIP code 85339 has experienced the biggest increase in value so far this year. The area, next to south Phoenix, saw its median price climb 24 percent to $159,950 from $129,000.
Waddell, north of Interstate 10 and west of the White Tank Mountains, has seen a boom in sales. In the first nine months of this year, 333 houses sold in ZIP code 85355. During all of 2012, 316 houses sold in the area. The median price of a house in Waddell is now $201,000.
The highest-priced houses in the southwest Valley are in Goodyear’s 85395 ZIP code, home to the Eagle’s Nest Golf Club community, where the median price is $271,542.
The most affordable houses in the southwest Valley can be found in Buckeye’s 85326 ZIP code. The area, stretching south of I-10 almost to Interstate 8, has a median price of $130,000.
In the northwest Valley, the Peoria neighborhood in ZIP code 85383 has a median price of $302,000. That’s the highest for the area. The ZIP code includes a couple of large communities, including Vistancia.
The Glendale neighborhood within ZIP code 85301 experienced a 36.9 percent increase in values. The median price in the area, north of Maryvale, climbed to $89,000. The neighborhood is also the most affordable in the West Valley.
Sun City West has had an 8.4 percent increase in median prices this year, the smallest increase in the West Valley.
Prices rose the most in south Scottsdale’s 85257 ZIP code. The median price in the community, bordering Phoenix to the west and Tempe to the south, rose 27.3 percent to $165,000. The neighborhoods are Scottsdale’s most affordable housing areas.
As usual, Paradise Valley has the highest median price in metro Phoenix. ZIP code 85253’s median price is $1.275 million. That’s up 15.9 percent from 2012.
ZIP code 85259 in central Scottsdale, west of Loop 101, saw values climb the least this year. The median price in the neighborhood rose less than 5 percent to $558,750.
Older affordable neighborhoods in Mesa’s 85201 ZIP code saw the biggest price increases in the southeast Valley so far this year. The median price of a house in the area, south of the Red Mountain Freeway, has soared 46 percent to reach $130,000.
The southeast Valley’s highest-priced houses are in the Tempe 85284 ZIP code. The area, between Elliot and Ray roads and I-10 and Loop 101, has a median price of $348,900. Values have climbed 14.4 percent in the neighborhood, the lowest increase for the southeast Valley.
New-home prices in metro Phoenix climbed the fastest in Gilbert ZIP code 85297, west of the San Tan Freeway and north of Queen Creek Road. There, the median new-home price rose 46.9 percent to $343,698.
The Queen Creek area in ZIP code 85142, just west of the Gilbert area with the biggest increase, saw the smallest Valley increase in new-home costs. The area’s median new-home price climbed less than 1 percent, to $259,179.