More than half of all the ZIP codes in Maricopa and Pinal counties posted their biggest annual increase in home prices since the crash, according to The Arizona Republic’s latest Valley Home Values Report.
The median sales price was $205,000 on Dec. 31, compared with $164,000 in December 2012. Prices also rose 35 percent in 2012, meaning prices are back to about 2003 levels for most people.
Overall, the more affordable parts of the Phoenix area posted the biggest increases in home prices. The median home sales price in Mesa’s 85201 ZIP code, an older part of the city next to central Tempe, climbed the highest — 50 percent — last year among the region’s ZIP codes. The typical house sold for $135,000 in the area, about $50,000 below the Valley’s overall median.
Most homeowners shouldn’t expect a repeat of big 2012 or 2013 price increases because fewer prospective buyers are in the market now. In addition, the number of listings available is up 10 percent from February 2014, according to the Arizona Regional Multiple Listing Service.
“We are seeing a big drop in demand compared with the last two years, and there are ominous indications of a softening market when we dig deep into the numbers,” said Mike Orr, director of the Center for Real Estate Theory and Practice at Arizona State University’s W.P. Carey School of Business.
“The market conditions suggest prices will struggle to make any further upward progress in 2014.”
The West Valley drew the most buyers and the highest home-sales numbers in 2013. Rapidly rising home prices in the southeast Valley communities of Chandler, Gilbert and Mesa also spurred more buyers to move to Pinal County, where prices are more affordable.
Here’s The Republic’s analysis of metro Phoenix housing markets by region, based on 2013 home-sales data provided by real-estate data service informationmarket.com.
Home prices in many southeast Valley communities have soared during the past few years as the area has drawn buyers of new and existing houses.
Tempe posted the biggest increase last year, 26.3 percent.
The ZIP code with the biggest jump in values across the Valley during 2013 is Mesa’s 85201, which includes the area around Arizona State University.
Chandler had the smallest increase in its median home price last year, with a gain of 19.5 percent.
Chandler and Gilbert have attracted the most new-home buyers during the past few years. Gilbert’s median new-home price jumped 37 percent to reach $325,000 during 2013. The hottest ZIP code for new homes in the southeast Valley was Gilbert’s 85295, bisected by the Loop 202. In that area, the median price of a newly constructed house shot up 89 percent to $335,500 in December compared with December 2012.
John Gluch of HomeSmart Realty recently sold one of his rental houses in Tempe because he doesn’t expect price increases in the southeast Valley this year.
“Chandler is still pretty balanced for supply and demand,” Gluch said. “But Gilbert has shifted to a buyers’ market.”
In a buyers’ market, the number of properties on the market exceeds the number of people actively looking for a house.
The Valley’s far southeastern suburbs all saw double-digit home-price increases in 2013 for the first time since the boom stalled in 2006.
Cities including Eloy and Casa Grande posted their biggest post-boom gains in home-sales prices.
Kirk and Megan Scallon recently got married and are looking for a home in Casa Grande. The couple want to pay about $140,000 and have plenty of homes from which to choose, said Gluch, who is working with them.
“It seems the right thing to do after getting married,” said Kirk Scallon, 29. “Time to buy a house, particularly when prices are low in Casa Grande.”
“Buyers can get a couple-thousand square feet of space for under $150,000 in parts of Pinal County,” said Gluch. It’s not necessarily too many homes for sale, but too few buyers.”
He said Eloy is the real wild card for housing in Pinal County because the city is working on attracting PhoenixMart, a large shopping distribution center, which would bring many jobs to the area.
Eloy’s median home price jumped 40 percent last year.
Other parts of Pinal County closer to Maricopa County, including Queen Creek and San Tan Valley, saw home prices climb less in 2013 than in 2012.
Home prices and gains varied widely in Phoenix. The most affordable neighborhoods in the city posted the biggest median price increases.
South Phoenix’s ZIP code 85040 posted a 48.6 percent jump in its median home-sales price last year, the second-highest in the Valley and biggest for Phoenix. The area’s median home price is now $89,000.
The west-central Phoenix neighborhood around Metrocenter Mall, ZIP code 85051, saw home prices jump 48.6 percent. And all the ZIP codes in southwest Phoenix’s Maryvale area recorded price gains of more than 40 percent.
Several north-central Phoenix neighborhoods saw home sales prices jump more than 30 percent last year.
“North-central’s housing market is strong,” said Bobby Lieb of HomeSmart Elite Group. “However, the inventory of homes for sale is almost double from last year.”
The median price of a home sold in the 85014 ZIP code, running along the west side of Arizona 51, climbed 39 percent to $190,299 during 2013. The median in the ZIP code to the north of it, 85020, rose 36.6 percent to $190,000.
Lieb said houses in the area have to be priced right or they will stay on the market for awhile. He said investors continue to buy in north-central Phoenix, even though they have stopped purchasing in other Valley neighborhoods.
The 85054 ZIP code in north Phoenix has the city’s highest median at $405,000, but the area saw values climb only 5.8 percent last year. That’s the smallest increase of any Valley ZIP code.
Scottsdale and Paradise Valley
Luxury-home sales increased last year, while sales under $500,000 fell. Most of metro Phoenix’s high-end homes are in Scottsdale and Paradise Valley.
But it was the south Scottsdale area, ZIP code 85257, that posted the biggest increase in home prices. During 2013, the median in that area climbed 28.8 percent, to $212,500.
The area with the highest median home-sales price in the region is Paradise Valley, ZIP code 85253. The area’s median home price climbed 19.5 percent, to $1.31 million. That was the biggest price gain for Paradise Valley since before 2008. The area’s median climbed 3.8 percent in 2012.
Scott Grigg of Realty Executives said demand for luxury homes is continuing this year, with more buyers asking to see houses priced above $1 million, and with the number of houses listed for more than $2 million climbing.
Southwest by northwest
The growing west side of metro Phoenix is split into two regions.
The southwest Valley encompasses Goodyear, Buckeye, Litchfield Park, Tolleson, Laveen and Avondale.
The most expensive homes in the southwest Valley now are in Goodyear’s 85395 ZIP code, north of Interstate 10 and around the Tuscany Falls Country Club. The 2013 median sales price in the area was $279,000, up from 2008’s price by 1.5 percent.
The affordable southern Buckeye area, ZIP code 85326, had the biggest increase in home values. The median climbed 27.7 percent, to $135,000.
The northwest Valley, including Peoria, Glendale and Surprise, offer a mix of affordable and high-end neighborhoods. The retirement communities of Sun City, Sun City West and Sun City Grand are also part of the region.
Peoria’s 85383 ZIP code had the highest overall median in 2013, at $314,000. It was also the only area in the northwest to improve on its 2008 median, climbing by 2.3 percent.
Sun City West saw the smallest increase in overall median sales price of any Valley community. The median rose to $169,900 from $155,000, a 9.6 percent gain.
Youngtown’s 85363 ZIP code had the northwest Valley’s lowest overall median in 2013, at $90,000.
Most metro Phoenix neighborhoods won’t see home prices climb in the double digits this year, but housing analysts say that’s not a bad thing for the market after nearly a decade of big ups and downs.
“Slowing price increases and inventory balance should deliver a stable market for 2014,” said Todd Gillenwater, CEO of Russ Lyon-Sotheby’s International Realty.
He believes that the number of sellers soon should approach the number of buyers.
“We are approaching market balance, a comfortable and coveted status in Arizona’s real-estate history.”
By Catherine Reagor, Matt Dempsey and Ryan Konig – Article Courtesy of AZCentral.com