Phoenix Arizona


Phoenix Housing Market by quotes

Greater Phoenix resale home market continues steady trend

MESA, Ariz. — The local resale housing market appears to be fairly stable, with 4,910 recorded sales in June 2007. The activity of June closely followed May 2007 at 5,220 sales and was not far below last year’s 5,460 transactions. The month of June brought the second quarter activity to a close with 14,990 sales, in contrast to 14,185 sales for the first quarter and last year’s second quarter sales of 18,310.

The current level of activity brings much needed sustainability; however, the 2007 year-to-date total of 29,175 homes is well below the 36,290 for 2006 year to date and 58,030 sales for 2005 year to date.

While the resale market is following a very traditional pattern, there are increasing risks that the market could move lower, driven by geopolitical risks and tighter mortgage underwriting guidelines,” said Jay Q. Butler, director of Realty Studies in ASU’s Morrison School of Management and Agribusiness at the Polytechnic campus. Both of these factors could make it increasingly difficult for people who desire another home to be able to finance it.

The new home market continues to be a competitive and attractive alternative to the resale home in many areas of the market as new home builders have been aggressively pursuing buyers through incentives such as specially priced up-grades, free pools and gift cards. Even with these concerns, the general expectation is that the 2007 resale housing market should be a good year, but nowhere near the records.

Much like the ever-increasing sales activity of the last few years, the rapid improvement in prices has disappeared. The median home price in June was $263,145 in comparison to $262,000 for May and last year’s $267,000.  For June 2007, 17 percent of all recorded sales were for homes priced from $125,000 to $199,999, 41 percent for $200,000 to $299,999 and 40 percent for homes priced over $300,000.  Last year, the distribution was 14 percent of all recorded sales were for homes priced from $125,000 to $199,999, 44 percent for $200,000 to $299,999 and 39 percent for homes priced over $300,000. Since the greater Phoenix area is so large, the median price can range significantly from $692,750 ($711,000 in May) in North Scottsdale to $148,500 ($158,500 in May) in the Sky Harbor area of the city of Phoenix.

Because mortgage interest rates decline slightly from last year’s 6.2 percent to 5.9 percent and home prices remained fairly stable, the monthly payment decreased slightly from last year’s $1,390 to $1,330. Even though mortgage interest rates have been declining over the last year, they have been in an upward trend for the last few months creating mounting concerns about the ability of some homeowners to acquire or maintain their homes. In response to issues raised in the subprime market, underwriting guidelines have been tightening, making it more difficult for potential buyers to qualify for a mortgage.

Townhouse/condominium units have retained some popularity with seasonal visitors, investors and people seeking affordable housing, so this housing sector showed an improvement from last year’s 1,035 sales to 1,125 sales for June 2007 (1,245 sales in May). Even with popularity, the median home price decreased slightly from $184,990 in May to $181,250.

The median square footage for a single-family home recorded sold in June 2007 was 1,725 square feet, which is larger than the 1,640 square feet for a year ago. The larger size further demonstrates the role of the move-up sector in the local housing market. In the townhouse/condominium sector, the median square footage was 1,105 square feet, which is larger than the 1,090 square feet reported a year ago.

  1. In contrast to June 2006, recorded sales in the city of Phoenix decreased from 1,725 sales to 1,320 sales, while the median sales price increased to $227,390 from $225,000 for a year ago. Since Phoenix is a geographically large city, the median price can range significantly such as $148,500 in the Sky Harbor area to $343,000 ($313,495 in May) in the Union Hills area. The townhouse/condominium sector increased from 300 to 370 sales, while the median price increased from $150,000 to $166,500.
  2. The Scottsdale resale home market declined from 465 to 415 recorded sales, along with the median sales price decreasing from last year’s $640,000 to $612,750. The median resale home price is $692,750 ($711,000 in May) in North Scottsdale and $316,000 ($320,000 in May) in South Scottsdale. The townhouse/condominium sector in Scottsdale stayed at 250 sales, while the median sales price decreased from $264,750 to $249,900.
  3. The Mesa resale housing market declined from 585 to 520 sales, while the median price fell from $247,600 to $235,000 ($238,000 in May). The townhouse/condominium sector also fell from 160 to 135 sales, while the median home price decreased from $156,250 to $154,465.
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  5. Glendale decreased from 430 to 325 sales and the median sales price decreased from $253,000 a year ago to $243,480 ($243,000 in May). The townhouse/condominium sector decreased from 70 to 50 sales, while the median sales price remained at $145,000.

       

·       For the city of Peoria, the resale market declined from 250 to 230 sales, while the median price moved from $272,900 to $255,000 ($255,000 in May). The townhouse/condominium sector decreased from 35 to 20 sales and the median price increased from $163,500 to $182,000.

  1. In comparison to a year ago, the Sun City resale market improved from 75 to 115 sales, while the median sales price decreased to $185,000 from $215,000. Resale activity in Sun City West remained at 45 sales, the median sales price decreased from $258,950 to $217,500. The townhouse/condominium market in Sun City remained stable at 45 recorded sales, while the median home price decreased from $143,250 to $127,750. In Sun City West, activity fell from 15 to 10 sales and the median sales price decreased from $178,000 to $175,500.
  2. The resale market in Gilbert decreased from 330 to 315 sales and the median sales price decreased from $330,000 to $297,000 ($300,000 in May). The townhouse/condominium market improved from 10 to 15 sales as the median sales price decreased from $238,750 to $189,900.

  • For the city of Chandler, the resale market fell from 380 to 370 recorded sales, while the median sales price went from $295,000 to $288,000 ($297,750 in May). The townhouse/condominium market increased from 40 to 45 sales, and the median sales price declined from $176,450 to $175,000.

§       The resale market in Tempe decreased from 160 to 140 sales, with the median sales price decreasing from $298,500 to $289,000 ($270,780 in May). The townhouse/condominium sector moved up from 70 to 95 sales, with the median sales price decreased from $191,000 to $183,000.

  1. The highest median sales price was in Paradise Valley at $1,932,500 with a median square foot house of 3,965 square feet.

·       In the West Valley, the following communities represent 10 percent of the resale market.

o       Avondale fell from 120 to 90 sales with the median price moving from $259,050 to $239,000 ($223,000 in May).

o       El Mirage decreased from 80 to 60 sales, while the median home price went from $215,000 to $195,500 ($200,000 in May).

o       Goodyear went from 90 to 80 sales, while the median price increased from $290,000 to $299,000 ($250,000 in May).

o       Surprise increased from 175 sales to 255 sales, while the median price decreased from $254,900 for a year ago to $230,000 ($245,070 in May).

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REalty studies

Realty Studies is associated with the Morrison School of Management and Agribusiness at Arizona State University’s Polytechnic campus. Realty Studies collects and analyzes data concerning real estate in the greater Phoenix metropolitan area. Realty Studies is a comprehensive and objective source of real estate information for private, public and governmental agencies.  Its director, Dr. Jay Q. Butler, may be reached at (480) 727-1300 or e-mail him at Jay.Butler@asu.edu. To subscribe to RSS feed for Realty Studies news, visit http://www.poly.asu.edu/realty/rss.html.

ASU’s Polytechnic campus, located in southeast Mesa, offers bachelor and graduate degree programs, unparalleled by other Arizona state universities, through the Morrison School of Management and Agribusiness, the School of Applied Arts and Sciences, the School of Educational Innovation and Teacher Preparation, and the College of Technology and Innovation. Visit us online at http://www.east.asu.edu.



RESEARCHERS FIND ‘LARGE IS SMART’ WHEN IT COMES TO CITIES by quotes

RESEARCHERS FIND ‘LARGE IS SMART’ WHEN IT COMES TO CITIES

TEMPE, Ariz. – Cities are considered by many to be both a blessing and a curse. Large cities generate considerable wealth; they are home to many high paying jobs and are known as engines of innovation. But cities also generate much pollution, crime and sometimes degraded social environments that lead to the urban blight that plague their very existence.
 
Now a team of researchers, including an economist from Arizona State University, has studied the growth of cities in different parts of the world and has come up with general equations that can foretell their resource consumption patterns as well as their contributions to society. The work has debunked the notion that cities act like biological organisms in the sense that they grow to a finite size and consume resources in ways that decrease per capita with size.
 
“It’s true that large cities have more problems, they are more congested, they create more pollution and they have more crime,” said Jose Lobo, and ASU economist in the School of Sustainability. “But also because of their size, cities are more innovative and create more wealth per capita. Large cities are the largely the source of their problems but they also are disproportionately the creators of the solutions to the problems of society at large.”
 
The researchers working with Lobo — Luis Bettencourt of Los Alamos National Laboratory, Los Alamos, New Mex.; Dirk Helbing and Christian Kuhnert of Dresden University of Technology, Germany; and Geoffrey West of the Santa Fe Institute, Santa Fe, New Mex. — detailed their findings in the article “Growth, innovation, scaling and the pace of life in cities,” in the current issue of the Proceedings of the National Academy of Sciences. An on-line version of the article was published on April 16, 2007 (www.pnas.org
<http://www.pnas.org> ).
 
“Humanity has just crossed a major landmark in its history with the majority of people now living in cities,” the researchers state. “The inexorable trend toward urbanization worldwide presents an urgent challenge for predictive, quantitative theory of urban organization and sustainable development.”
 
This will require thinking about cities in new ways.
 
The old way of thinking about cities is as if they are an organism, which consumes resources and grows in size. Oftentimes, cities are referred to as its own ecosystem and many use the metaphor of it acting like a biological organism, Lobo said.
 
“The one thing that we know about organisms whether it be elephants or sharks or frogs, is that as they get large, they slow down,” Lobo said. “They use less energy, they don’t move as fast. That is a very important point for biological scaling.”
 
“In the case of cities, it is actually the opposite,” he added. “As cities get larger they create more wealth and they are more innovative at a faster rate. There is no counterpart to that in biology.”
 
In fact, Lobo said, the larger the city the greater return on investment.
 
The researchers base their findings on data on the growth of cities (metropolitan areas) in the U.S., Europe and China over the past 150 years. They analyzed cities consumption of resources, (such as water or electricity usage), requirements for infrastructure (roads, transportation, lengths of electrical cable), they also compiled and analyzed data on the creative output of these areas (patents issued, “super creative jobs” generated, R&D employment, total wages). The sizes of the cities were determined by population.
 
What they found were some general correlations of size and resource consumption that more or less fit the biological organism metaphor, meaning as the city grew in size it required less energy (resources) to sustain it in a proportion called sublinear scaling. What was surprising to the team was that the creative output (jobs, wealth generated, innovation) as cities grew, becomes faster and faster per capita.
 
“It isn’t like if you double the size of a city you double its creative output,” Lobo said. “But it does increase by about 10 to 30 percent.”
 
“We are not saying that any large city is assured of prosperity forever, but if you look at the collection of cities, large cities have managed to out run their problems,” Lobo added. “Large is smart.”
 
All of this points to the need of rethinking large cities, both in how they are managed and what they contribute to the greater good. This is especially true today, as cities are on the brink explosive growth in the developing world. Today a little more than half of the world’s population live in large urban areas. By 2030, it is estimated that two-thirds of the world’s population will be living in urban areas.
 
“Cities are really one of the most important innovations in human history,” Lobo said. “We need to think of them as being very human entities and as engines of our collective creation. We need a different perspective about cities, one that is away from thinking of large cities as a source of problems, but rather as the possible and unavoidable sources of solutions.”
 
“The practical application of this work is that the problem is not large cities, the problem is the conditions in which some of the people live in large cities,” Lobo added. “Policies should be directed to making large cities more livable not making them smaller.”