Valley housing prices showed a year-over-year decrease for the third month in a row, according to a report from ASU’s W.P. Carey School of Business released Monday.
Overall, the October 2009 to October 2010 decline was 6 percent. Nonforeclosure prices also saw a 6 percent decline year-over-year, but that is considered positive news because nonforeclosure prices had been falling year-to-year between 9 percent and 13 percent for several months.
The report’s author, Karl L. Guntermann, said that trend is “clearly in the right direction.”
“I consider that an important index because that’s what affects most homeowners. If they’re not in foreclosure, then they’re looking at what’s happening to … equity,” he said. “I’m sure there are a lot of people out there waiting for the market to improve or at least stabilize before they look at selling.”
The up and down trends of the housing prices this year represents the volatility of the market, he said.
Month to month, there has been some improvement in median housing prices, he said. The preliminary median housing price in October was $125,000, up from August when it $122,000. Since June 2009, prices have fluctuated between $122,000 and $135,000.
Much of the Valley has seen a housing price drop of around 50 percent since the Valley’s housing peak in 2006.
So is now a good time to buy?
“You never know when you’re at the bottom. Given how much prices have fallen, you can now buy houses at prices back around year 2000. You have to ask yourself maybe this isn’t exactly the bottom, but how much lower can they go?” he said. “Interest rates are low if you can qualify for a loan. House prices are way down. You can look at it this way: How many goods can you buy that cost the same price now as they did 10 years ago?”
The Valley is entering its slow season as far as real estate, Guntermann said. This could result in lower median home prices.
Guntermann said he expects foreclosures to continue into 2011, but hopefully stabilize. The economy in the Valley is still poor and there won’t be much improvement in the fluctuating housing market until more jobs appear, he said.
“What’s lacking is job creation. As soon as we start getting significant job creation, we’ll have people moving here. Migration follows jobs by a couple of quarters. When the jobs turn around … once those people move here they need some place to live. That has to help the apartment market and at some point the housing market,” he said.
Guntermann is the Fred E. Taylor Professor of Real Estate for the W.P. Carey School of Business.