The Republic | azcentral.com
Mon Jun 10, 2013 5:26 PM
Metro Phoenix’s median home-sales price climbed to $181,399, an almost 60 percent increase from the real estate crash’s low price in August 2011.
Despite the increase in sales prices, Arizona State University real estate analyst Mike Orr doesn’t project another housing bubble in the Phoenix area anytime soon.
“We predicted prices would rise significantly during the strong annual buying season that lasts until June,” said Orr, director of the Center for Real Estate and Practice at ASU’s W.P. Carey School of Business.
The main reason for higher home sales prices is the chronic shortage of available houses for sale in the Phoenix area, he said. The number of houses listed for sale in the region fell 7.3 percent in April.
Because of rapidly rising home prices, some market watchers are concerned that many investors who bought inexpensive short sale and foreclosure homes and turned them into rentals during the past few years, will try to resell those homes now and create a bubble of oversupply.
“Some commentators talk ominously of a bubble bursting when these homes come back onto the market,” Orr said. “Such talk gets a lot of attention because we are over-sensitized to bubble talk after the disruptive events of 2004 to 2006.”
He said even if all the big investors put their homes on the market next month, that would only add 10,000 to 11,000 houses to the number of listings, and the Valley’s market would still be undersupplied based on demand.
Rising mortgage interest rates are another concern for some housing analysts and prospective buyers.
Orr said sometimes higher interest rates create a greater sense of urgency for homebuyers, which works to increase to demand instead of reducing it.
His forecast is for metro Phoenix home sales prices to continue to climb in coming months, but at a slower pace.
Despite the increase in sales prices, Arizona State University real estate analyst Mike Orr doesn’t project another housing bubble in the Phoenix area anytime soon.
“We predicted prices would rise significantly during the strong annual buying season that lasts until June,” said Orr, director of the Center for Real Estate and Practice at ASU’s W.P. Carey School of Business.
The main reason for higher home sales prices is the chronic shortage of available houses for sale in the Phoenix area, he said. The number of houses listed for sale in the region fell 7.3 percent in April.
Because of rapidly rising home prices, some market watchers are concerned that many investors who bought inexpensive short sale and foreclosure homes and turned them into rentals during the past few years, will try to resell those homes now and create a bubble of oversupply.
“Some commentators talk ominously of a bubble bursting when these homes come back onto the market,” Orr said. “Such talk gets a lot of attention because we are over-sensitized to bubble talk after the disruptive events of 2004 to 2006.”
He said even if all the big investors put their homes on the market next month, that would only add 10,000 to 11,000 houses to the number of listings, and the Valley’s market would still be undersupplied based on demand.
Rising mortgage interest rates are another concern for some housing analysts and prospective buyers.
Orr said sometimes higher interest rates create a greater sense of urgency for homebuyers, which works to increase to demand instead of reducing it.
His forecast is for metro Phoenix home sales prices to continue to climb in coming months, but at a slower pace.
