Metro Phoenix home prices hit new record, still no signs of crash

Metro Phoenix home prices hit new record, still no signs of crash

Metro Phoenix home prices set new record, still no signs of a crash

Catherine Reagor Arizona Republic
Published 9:15 AM EDT Jul 13, 2019

Buyers hoping for metro Phoenix home prices to fall this year as they are in some other U.S. cities have been disappointed.

The Valley’s housing market is still hot with prices setting new records and sales soaring.

 Real estate experts don’t see signs of a crash looming.

“It’s not happening” said Tina Tamboer, senior housing analyst with the Cromford Report, about a potential plummet in the area’s home prices.

She told nearly 200 Valley HomeSmart real-estate agents Tuesday that, thanks in part to lower interest rates, demand for metro Phoenix homes began climbing again in March.

Still a sellers’ market

Metro Phoenix’s median home price hit a new record of $278,000 in May and likely climbed to $280,000 or more in June, according to the latest report from the Information Market, owned by the Arizona Regional Multiple Listing Service.

Valley home sales hit 10,341 in May, the highest monthly tally since the housing boom in 2005.

Mortgage interest rates are down from nearly 5% last November to 3.75%.

And the supply of Valley homes for sale priced below $400,000 is down, after climbing in January.

“It’s still a sellers’ market, but people need to be reasonable and not crazy about pricing their home,” said veteran agent Bobby Lieb, who held the HomeSmart meeting.

 He has seen several Arizona real-estate cycles and doesn’t see a crash coming either.

No housing crash looming

In June, I was in a Phoenix doctor’s office and overheard two women talking about how the housing market was “crashing again.”

While I waited, I couldn’t help but listen as one woman told the other that her home’s value could fall like it did during the crash of 2009. I sent a text to some of my top sources joking that the conversation alarmed me more than the breast cancer diagnosis that put me in the doctor’s office that day.

The overheard conversation made me anxious to get back to work this week and write this column.

85006/Central Phoenix, including historic neighborhoods Coronado and Garfield — $211,500 to $255,000 — 21%
Melissa Fossum/Special for The Republic

A little housing perspective

 Valley home prices shot up 50% in two years during the boom in 2005 and 2006. Home prices have climbed at a far more modest 6% to 8% the past few years. 

 The U.S. median home price did fall in April, and cities on the East and West coasts are seeing declines. But metro Phoenix’s home prices are still much lower than those areas.

Housing expert Tom Ruff with the Information Market, who I texted that day, said he gets “nauseous” when he looks back on the steep increases and all the subprime loans in 2006. 

“Current (mortgage) underwriting standards and the elimination of crazy money are two of the main reasons I subscribe to the ‘were not in a bubble’ theory. The differences between the boom and now are significant,” he said.

But he, like Tamboer and many of us market watchers, will keep checking to make sure the Valley’s housing market isn’t headed for another crash.

 Reach the reporter at [email protected] or 602-444-8040. Follow her on Twitter @Catherinereagor.

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Published 9:15 AM EDT Jul 13, 2019

This content was originally published here.

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