Two national reports paint an even bleaker picture of home values across the Valley and Arizona. New figures released Tuesday from the Federal Housing Finance Agency show the value of the average home in this state plummeted more than 6 percent in the three months ending Sept. 30.
And year-over-year, values are down by 13.5 percent.
That means, on average, a house that was worth $200,000 on Oct. 1, 2007, is now worth $27,000 less.
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That decline is the sharpest ever recorded by the agency for Arizona since it has been tracking these numbers beginning in 1985. Only Nevada, California and Florida home values posted larger annual losses.
Nationally, the value of the average home dropped 2.6 percent in the most recent quarter and 4 percent year-over-year.
Also on Tuesday, the Standard & Poor's/Case-Shiller 20-city housing index showed the Valley fell nearly 32 percent in September compared to the same month last year, the largest decline ever recorded for the region. The 20-city index fell 17.4 percent, setting a new record low.
"Phoenix was the worst performer and it got worse," said Maureen Maitland, S&P's vice president of index services. "But to put it in a little bit of perspective, in 2005, Phoenix prices were going up at a rate of 50 percent. This is basically just a pull back from that."
The Valley was down 3.5 percent in September compared with August.
"That's a pretty sharp decline for just the one month," Maitland said. "If you multiply 3.5 percent by 12, you're talking about rates of decline that would be approaching 40 percent if not more. It has not reached bottom yet."
Federal Housing Finance Agency director James Lockhart attributed much of the sharp drop in values nationwide to both the spike in foreclosures as well as tightening credit. He said recently approved federal legislation could help alleviate both.
But Patrick Lawler, chief economist for FHFA, said a turnaround in values requires both a reduction in unsold homes on the market as well as greater confidence in the real estate market by buyers.
Chris Bastian, a realtor with Cirrus Realty in Tempe, said it's a great market for buyers, but several factors are keeping sales down.
"I think a lot of the problem is (many) potential buyers have houses to sell, and then a lot of the first-time homebuyers need the (down payment) assistance, and we've lost quite a few of those programs," she said.
East Valley real estate agent Jay Thompson said the glut of foreclosures on the market are pushing values further and further down.
"Until some of this foreclosure inventory bleeds off, we're going to see depressed prices," he said. "I personally think we're going to bottom out ... toward the end of 2009."
The Federal Housing Finance Agency figures are a key indicator of actual home values.
That is because FHFA tracks the both the sale and government-backed refinancing of the same houses.
By contrast, median sales figures for a market simply measure the prices of the homes that change hands in that particular month or quarter..