August proved hard month for home resales

Dismal Valley home-resale activity in August wiped away all statistical traces of the four-month recovery period that had preceded it, according to an ASU report issued Wednesday.

A major contributor to the Arizona State University Repeat Sales Index's retreat into negative numbers after breaking positive in April was the relatively poor sales performance of recently foreclosed-on homes, according to the report's author, professor Karl Guntermann.

"The weakness in prices may mean there finally is insufficient demand to absorb the steady stream of foreclosures that enter the market each month," he said. "It is too early to tell if the decline is the start of a new trend or reflects just a temporary slowdown."

Sales of bank-owned homes had been one of the stronger segments of the market in recent months, Guntermann said, but the price index in that segment declined 4 percent in August after five straight months of increases.

The Repeat Sales Index is based on annual changes in the average sale price of a select group of Phoenix-area homes that have sold multiple times, with zero indicating no change from a year earlier.

The index for August was still considered preliminary as of the report's release, Guntermann said.

In August, the index was at minus 2, down from the recent high of almost 3 in May. In July, the index was at zero.

Still, the Phoenix-area housing market was far more stable in August than it had been a year earlier, when the index was at minus 25.

Median home prices in the Valley also took a steep dive in August, falling to $122,000 after hitting a high of $135,000 in April. The median price in July was about $130,000.

The median price of a Phoenix-area townhouse or condominium in August was just $65,000, down from abut $77,000 in July, the report said.

"This is a continuation of a downward trend that began in June," Guntermann said. "Condo prices seem to periodically take a step down in price and then stabilize for several months before starting the next decline."

by J. Craig Anderson The Arizona Republic Oct. 7, 2010 12:00 AM





August proved hard month for home resales