Saturday, January 15, 2005

Phoenix housing market sizzling


Values soar; demand outstripping supply

Ginger D. Richardson
The Arizona Republic
Numbers released earlier this week prove what Phoenix real estate agent Tom Bryant already knew: The city's housing market is unbelievably hot.

Bryant and other Realtors say escalating home values, coupled with insatiable growth and a demand that greatly outstrips supply, likely means that this trend is going to continue.

"I have been hearing the same questions since 1999," said Bryant, who works with Realty Executives in central and north-central Phoenix. "Is this the bubble? But our market is still underpriced compared to comparable cities across the nation."

A new report released Tuesday said Maricopa County set records last year for the number of sales and for the median price of resale houses. Phoenix was no exception.

There were 102,115 sales of existing homes last year in metro Phoenix, a 38 percent increase from the annual record of 73,785 in 2003, according to the Arizona Real Estate Center at Arizona State University.

And the number of homes selling isn't the only thing increasing. Sales prices also are going up.

According to newly released numbers, the median price of a home in Phoenix ranged from $225,000 in the Union Hills area to $125,000 in and around Metrocenter to $99,000 near Sky Harbor International Airport.

The median price of a Valley resale home rose nearly 13 percent, to $174,815.

Industry analysts say the trend is being partly fueled by the number of eager buyers vastly outweighing the number of willing sellers.

"I have definitely seen a decrease in inventory," Bryant said.

But what's good for most isn't beneficial to all. In fact, the home-buying frenzy is actually pushing some first-time buyers out of the market.

"The entry-level housing, whether it be condo, town home or single-family house, is getting harder to come by," Bryant said. "That's the downside of the great market. Every time you have those kinds of conditions, you are freezing someone out."

Market conditions are being driven, in part, by investors who speculate on the continued increases in Valley housing prices. The market is also fueled by move-up buyers cashing out of one home to buy a bigger or better one.

As a result, Valley houses priced right sell within days, or even hours in some neighborhoods.

Phoenix resident Gene Cohen knows how frustrating that can be. He spent more than five months trying to buy a home, only to lose out to others who were eager to snap up the same properties.

In one case, Cohen made a full-price offer without even stepping inside the house. That deal ultimately fell through, and Cohen finally closed on another property last week.

That home, near 19th and Claremont streets, stayed on the market only one day, and Cohen got it by offering more than the asking price and agreeing to a range of closing dates.

"It's definitely a seller's market," he said.

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