What is Happening to Home Prices?

We've all seen the news. "Home prices slide", "Risk of a double dip in home prices" etc. But is it worth a few minutes to better understand what is happening to home prices here in Arizona? I do, so here we go.

The Product Mix

First of all, real estate is a very localized affair and needs to be evaluated as such. So while we see articles on the national housing market, let's take a closer look in our backyard here in Arizona.

Pricing in its simplest form is a function of supply and demand (remember those college economics classes? I am lucky enough to hold a degree in Economics….). But what many people seem to overlook in housing is that you also need to understand the type of product being sold, and what impact that has on overall pricing metrics.

We did some analysis on MLS data to determine the product mix of residential homes being sold in Tucson and in Phoenix for the time period January-May 2011. Specifically we wanted to know the mix of distressed (REO and short sale transactions) and non-distressed closed sales. Here are the results:

Tucson – 43% REO (Bank owned) sales, 9% short sales and 48% non-distressed sales

Phoenix – 42% REO (Bank owned) sales, 20% short sale and 38% non-distressed sales

52% of closed sales in Tucson and 62% in Phoenix were distressed.


Impact of Distressed Sales on Pricing

So now that we know more than half of residential properties sold were distressed, let's take a look at the impact that has to pricing.

Housing Pricing

We see a stark difference in pricing from distressed to non-distressed homes.

The product mix is driving down the overall home price sales. As this distressed inventory gets absorbed (which is happening now at a good clip) the product mix will start to shift back to more non-distressed sales, which means we may have a more instant uptick in home sales prices – just because of the product mix.

Another reason to work with an educated Long Realty agent who can help you understand local housing dynamics.

For a copy of our latest Housing Report to see market trends in your area, visit our website

This entry was posted in Housing Market, Uncategorized and tagged , . Bookmark the permalink.

4 Responses to What is Happening to Home Prices?

  1. Shay says:

    The sky is the limit and all sorts of you’ll need is a bit
    creativity along with the right friends. Should have gone with my gut,
    hope they provide it easily. Forgotten that is certainly to most modern stationary users,
    however, not it gave the impression to the hundred or so personalities from world wide, who had evidently chosen to represent themselves or their business with something a bit special.

  2. proxy bay says:

    It’s simple to get caught up in your own personal writing and allow it
    to go pull you along. Torrent files, when added into a torrent application, could be
    distributed among numerous amounts of people without involve any major
    hardware costs and server fees with a particular individual.

    s the aim of anything you do if your nose is indeed close to the grindstone that you simply don.

  3. Gracie says:

    It started with i – Phone and it has now moved to i – Pad 2; the reason- lack of availability.
    s no secret that illegal file sharing continues to
    be rampant in several countries, such as the US, however, it might not
    be government interference that eventually leads on the end
    with the age of illegal downloads. We’ll start our tour at Marina Grande around the north shore in
    the island, about one third of the way in looking at
    the easternmost point.

  4. But within the last few years, IPTV has dwarfed the quality
    of DVD and Cable TV. So far, reactions for the acquisition, as well
    as to the announcement with the new business model, are actually
    mixed, but only time will inform whether or not
    just a revamped version with the massively popular peer-to-peer website will
    be as successful since its predecessor. There are a handful of significant improvements made over Vista, but for the most part, it’s only a version of Vista
    which is both stable and much more user-friendly.

Leave a Reply to http://www.bakebikeblog.com Cancel reply

Your email address will not be published. Required fields are marked *