Recent government shutdown dings AZ home buying - | Lufkin and Nacogdoches, Texas

Recent government shutdown dings AZ home buying


Phoenix area home buying this fall has waned and it may be because of the recent government shutdown creating economic uncertainty, a new housing report stated.

The report from the W. P. Carey School of Business at Arizona State University observes "the sudden weakness in owner-occupier demand since July is unusual and unexpected."

"Since the beginning of July, the Phoenix-area housing market has cooled dramatically," said the report's author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business.

"The main change is a steep fall in demand, which we can see in the 12-percent drop in single-family-home sales activity just between August and September alone. Going forward, we anticipate a much slower rate of price appreciation than the furious pace we have witnessed over the last two years."

On the other hand, the report said area home prices have been rising since hitting a low point in September 2011. The median single-family-home price rose 32.7 percent - from $150,000 to $199,000 - from last September to this September.

The average price per square foot went up 22 percent. The median townhouse/condo price went up 30 percent, to $117,000. However, the price gains are expected to slow down, the report stated.

The luxury market continues to perform well, owing to the rising stock market and a big increase in the availability of jumbo loans. Sales of $500,000-plus, single-family homes grew an incredible 51 percent from September 2012 to September 2013.

However, cheap homes are tough to find, with fewer foreclosures coming onto the market. Foreclosure starts dropped 61 percent from last September to this September. Completed foreclosures declined 63 percent.

Institutional investors and out-of-state buyers continue to lose interest in the Phoenix area, since better bargains can now be found elsewhere, the report stated.

The percentage of homes and condos bought by investors in September was down to 22.7 percent, from the peak of 39.7 percent in July 2012.

Also, the percentage of Maricopa County residences sold to owners from outside Arizona was only 16.4 percent, the lowest percentage since January 2009.

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

Powered by Frankly