Oct. 6, 2006: The Greater Phoenix real estate market is slow, but it's not on life support
The nationally reported real estate news is dire, of course -- bad news trumps good news.
The locally reported real estate news is largely defined by year-over-year comparisons, which tends to make things look worse than they really are. Is our market in excellent shape? Far from it. But neither should it be put on life support.
For the kinds of homes common on the west side of the Valley, September was a repeat of August, itself a repeat of July. Prices flat, sales slow but not awful, discounting moderate. Days on market is climbing, but available inventories of newer suburban homes are declining. (You can read more about these results at bloodhoundrealty.com/MarketBasket.php.)
But as interesting as those results are -- and as promising for the recovery of our market -- they speak only of sold homes. What about the homes that are not selling?
I'm looking at houses right now for an investor. He picked out one he was interested in, and, as a matter of course, I searched every similar listing in that subdivision -- active, pending and sold -- going back to May.
I found 10 active listings with that floor plan in that subdivision. This is as close as you can get to identical comps, like little plastic Monopoly houses, each one the twin of the next.
All of them were built between 2002 and 2004, all by the same builder, of course. All upgraded to some degree, none to the ultimate degree. No premium lots, no view lots, no pools.
What's the spread of prices for these nearly identical homes? They run from $245,000 to $360,000, a difference of $115,000.
Which ones will sell?
The best-kept houses at the low end of the price spectrum will sell. The others will not. They won't even be shown.
The nature of this market is that people are still seeking prices for their homes that would have been outrageous a year ago, as we neared the end of our housing boom. Whatever they might say, these people are not motivated to sell their homes right now.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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