Housing sale prices keep rising

by J. Craig Anderson - Oct. 21, 2009 12:00 AM
The Arizona Republic

The Valley housing market has settled into a pattern of mild price recovery, with the median sale price rising by a few thousand dollars in recent months, according to the latest Arizona State University report on same-home sales.

But the report's author warned area residents not to interpret his findings as proof that home prices have stabilized.

Professor Karl Guntermann, who published the most recent ASU Repeat Sales Index report on Tuesday, said there are signs that home foreclosures in 2010 could jolt the housing market out of its current state of relative calm.

"The worst appears to be past, but the large number of foreclosures likely to hit the market through 2010 makes it difficult to predict the direction of house prices with any certainty," said Guntermann, of ASU's W.P. Carey School of Business.

The ASU index continued to show a steady decrease in the gap between home-sale prices in 2009 and prices a year earlier.

In July, the most recent month covered by the index, home prices were down about 28 percent compared with July 2008, and the median sale price was $125,000.

The index showed steady improvement from June, when the year-over-year decline was 31 percent, and the median sale price was $122,000.

The same-home sales index, which compares prices of homes that have been sold multiple times since 1989, shows an uninterrupted run of year-over-year price decline that has lasted a record 29 months.

However, Guntermann said 2010 is likely to see that losing streak reach its end. With the year-over-year gap closing by 2 to 3 percentage points each month, it's likely the index will cross over into positive territory by the end of next year, he said.