Metro Phoenix home prices drop record 18%

[Source: J. Craig Anderson, Arizona Republic] — Valley home prices continued their year-over-year plunge in April, dropping a record 18% as the impact of foreclosures and other economic factors exerted even greater influence, according to an ASU report issued Tuesday.  The Arizona State University Repeat Sales Index, which tracks repeat same-home sales, reported an “off-the-cliff drop” in home prices because, in large part, of foreclosures, which made up 20% to 30% of all April home sales.  ASU real-estate Professor Karl Guntermann, who compiled the report, said the continued rise in foreclosures was significant, but that gas prices, interest rates, tougher lending standards, and buyer psychology also took their toll.  “It’s not just one thing,” he said.  “That’s what’s so depressing, in a way.”

For March, ASU reported a 13% drop in year-over-year home prices for the Phoenix metropolitan area, at that time the largest decline ever recorded:

  • Northeast region, which includes north Phoenix, Paradise Valley, and Scottsdale, saw its first-ever double-digit drop in home prices, down 10.2% from the previous April.  Its year-over-year decline in March was just 4.3%.
  • Southwest region, which includes Avondale, Buckeye, and Goodyear, had the worst year-over-year slide, as home prices plummeted 30.6% from a year earlier, falling even further from March’s 12-month decline of 22.9%.
  • Central region, which takes up most of Phoenix, saw an additional decline of 4% compared with the previous month, bringing the total year-over-year price dip in April to 18.4%.
  • Southeast and Northwest Valley regions each fell another 4% from the 12-month drops they had seen in March, bringing their April price decreases to 17.8% and 23%, respectively.  The only positive surprise was in Sun City and Sun City West communities, where home prices were down just 14.2% from April 2007, a slight recovery after six months of being among the hardest-hit areas.

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