Housing Market May Be Near Bottom

by Peter Corbett - Jul. 30, 2009 10:42 AM
The Arizona Republic

Has the local real estate market hit bottom?
That's what everyone wants to know. The Valley housing market is "near the bottom," according to a Grubb & Ellis BRE Commercial report updated this past week.
"However, stabilization may be deferred somewhat by the global recession - a context that will affect most economic activity," the report said.

Other reports indicate home values in the Valley are still declining.
The Case-Shiller Price Index released earlier this week shows that Phoenix-area prices declined for the 36th consecutive month in May.

Las Vegas, Los Angeles, Miami and Seattle were also down in May while 15 other major cities showed price increases in the Case-Shiller study, which relies on repeat home sales to track markets.

"Everyone agrees it's a slow process," Ross Smith, Grubb & Ellis senior vice president, said of the recovery.
"If we've stabilized, that's huge," he said. "If people see the price may go up if they don't act soon, that will get things moving again."

One sign of the improving market is builders are once again buying finished lots to resume building, Smith said.

High-end market still troubled
Scottsdale's housing market is more mature and was not as deeply affected by the downturn and foreclosures as the newer fringe areas, Smith said.
But financing constraints are still hurting sales at the upper end of the Scottsdale market, he added.

Still, sales are picking up, and John Hall & Associates in the Northeast Valley is on pace to have its best sales month in more than three years, Realtor Phil Sexton said.
"It's the tale of two markets," he explained.
He said most of the activity involves homes priced at less than $450,000.
There is a lot of downward pressure for homes priced above $450,000, and it's a buyer's market, Sexton said.

The upside of the Valley's declining home prices is affordability, especially for first-time buyers who are eligible for an $8,000 federal tax credit if they buy a home before Dec. 1.
More than 81 percent of the homes sold in the Valley in the first quarter were affordable to families earning the area's median income of $65,900, according to the National Association of Home Builders.