Thursday, November 25, 2004

Housing prices surge, but experts foresee market slowing

By Joe Kovesdy, Ahwatukee Foothills News

Staff Writer

Prices for existing homes on the market jumped 6 percent in October, making cheaper houses scarce in Ahwatukee Foothills.

October median prices for existing home sales reached $247,450 in Ahwatukee Foothills, compared with $233,950 in September.

For buyers, higher interest rates combined with stable income and higher home prices will make affordable housing a tougher find in the Phoenix area, according to Jay Butler, director of Arizona State University's Real Estate Center.

Chris Meyer, a real estate agent with Realty Executives, said the rise in prices requires him to move quickly to show affordable houses.

"If I show two homes to a client in the morning and another opens up in the evening ­ I have to show it right then," Meyer said.

For cheaper housing, buyers are moving farther and farther outside Phoenix to East Gilbert, Maricopa, Coolidge, Laveen, Buckeye and Surprise, where buyers feel pressure to place first dibs on housing opportunities.

"To find something affordable you're going to have to go way east or way west," Meyer said. "People are camping out so that they can be first in line for new lots ­ up to four days."

The most affordable homes in the Ahwatukee Foothills ­ homes at $200,000 and under ­ can be found in the area surrounding the Warner-Elliot Loop. Built mostly between 1978-84, these homes are single family with shingle roofs, Meyer said.

According to the Real Estate Center, the number of Ahwatukee Foothills homes resold in October was 180, compared with 115 in October 2003.

Economist Elliott Pollack, president of Elliott D. Pollack & Co., an economic and real estate consulting firm in Scottsdale, said that a slowdown in activity in California and other parts of the country suggests the same may be headed for Arizona.

"The coasts are probably in the early stages of a housing bubble," Pollack said at the East Valley Economic Forum on Nov. 16.

"People have been substituting their home as a credit card," he said. "This works as long as interest rates are low and housing rates are up."

Pollack added that the Valley housing market is not sustainable at its current level.

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