Real estate expert predicts another housing market crash in AZ - KTRE.com | Lufkin and Nacogdoches, Texas

Real estate expert predicts another housing market crash in AZ

MESA, AZ (CBS5) -

Things have been looking up for Valley homeowners with housing prices up 28 percent since last year.

But don't get too excited.

A national real estate expert is predicting another crash for Arizona's housing market.

Real estate analyst Mark Hanson, with Hanson Advisors, recently said in Businessweek magazine that rising interest rates, higher home prices and a decrease in investors will lead to a lag in buyers and bring Arizona's housing market down.

He predicts a decline of 20 percent in housing prices over the next 12 months.

And that has homeowners like Amy and Steven Smith of Mesa feeling a bit uneasy.

"I hope it's not a bubble," said Amy Smith. "I still haven't made up the money that I paid for my home to begin with."

Michael Orr is director of ASU's Real Estate Theory and Practice.

He said the Valley's housing market is still showing positive signs, and there's no indication we're in a bubble.

"What we've experienced is a very dramatic crash and a balance because we over-corrected," said Orr. "We are now back to pricing levels you would expect on a normal trend line. We've got far fewer investors buying for less cash transactions, and most of it's financed. The market is going back to normal, and normal means home prices go up quite gently."

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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