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Tuesday, September 12, 2006

Are Valley Home Prices Going Up or Down?

I recently received an email advertising brand new Dietz-Crane homes out at Johnson Ranch from $118,000.  This time last year, even new homes way out at Johnson Ranch were starting much higher than that.  No doubt that's a starting price, but seeing such a low price made me go on MLS to take a look at what's on the market and what prices look like.

I looked at the data in a million different ways and here's what I found.  Many of the outlying areas are seeing prices decrease somewhat.  I'm not talking about huge drops in prices, so if you live at Johnson Ranch don't freak out and sell your house just yet!  But I think the people who bought houses that are really far out there (in any direction) from Phoenix are beginning to realize that the drive to work is miserable.  Especially with gas prices as high as they are.  If you drive through certain neighborhoods way out in the southeast valley, you'll almost see more houses with 'For Sale' signs than without.  The values in these areas are already lower than a similar home closer to Phoenix, that's why people are willing to buy houses that are way out there!  And the competition created by the huge number of houses for sale further drives prices down.

But it's not all bad news, I also found good news for some homeowners.  While prices are decreasing in some areas, home prices are STILL going up in other areas.  Unbelieveable, huh?  Quite frankly, with the amount of inventory currently available, I'm surprised prices are going up anywhere, but they are.  I pulled comps for my own neighborhood in Mesa (which I do regularly), and I was very pleasantly surprised.  Prices in Tempe, Scottsdale and Phoenix also seemed to be stable, if not increasing.

There's no doubt the Valley's real estate market is still a little weird.  Mortgage rates have alot to do with it.  They started to go back down for awhile, but now seem to be on the rise again.  I've said it before and I say it again...our real estate market is not a 'bursting bubble', no matter how many news stories say it is.

Visit Shannon Hubbard's Home Page     Written By: Shannon Hubbard
Realtor®-Investor

Great American Realty, Inc.

Cell: (480) 695-6672
Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on September 12, 2006 | Permalink

Comments

New construction prices are taking a beating right now. In many developments builders are discounting, offering loan financing packages or offering a lot of free upgrades. However, this trend will most likely only last for the next eight months. After that the buyers' market mentality will kick in.

BN
4MySales.com

Posted by: Barrett Niehus | Sep 14, 2006 5:40:34 PM

You are definitely right about that Barrett. I've seen crazy incentives including MUCH higher than normal co-brokes, very gernerous leaseback offers, free pools and appliances, and I even saw at least one builder offer a free car with the purchase of a new home! I also agree it won't last and this would be a great time to buy a newly constructed home. Thanks for your comment!

Posted by: Shannon Hubbard | Sep 15, 2006 11:02:30 AM

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