Tuesday, August 11, 2009

Where should prices be today?

Phoenix has historically been a very stable real estate market.  Yes, 2005 was beyond anything we could have imagined.  And yes, we’ve been paying for our excesses for more than 2 years now, with prices falling to less than the cost of building in many cases.

Have prices fallen too far?  Have the investors figured that out, and that’s what’s causing the bank-owned foreclosed homes to be sold as fast as they are hitting the market?

Maybe.  In fact, I wrote a post awhile back showing the prices in 2008 didn’t seem too out of line, statistically speaking..

The chart below shows the Average Sold Price for all Single Family Dwellings in Maricopa County, by Month, going back to 1/1/2000.

I took the pricing from 2000, 2001, and 2002 – a very NORMAL period in Phoenix real estate history, and drew a trend line out to today.

The pricing run-up from mid-2003 through 2006 is obvious.  However, it does look like prices have over-corrected.  Hmmmm.  Interesting…

(Click on the chart below to see a full-screen view.)

Maricopa County sales price by month

Your thinks the numbers speaketh the truth Realtor,

Chris Butterworth