Foreclosures push Phoenix home values to 18 percent year-to-year decline
Real Estate News from the We Buy Houses Team
Foreclosures now account for between 20 and 30 percent of home resales in the Phoenix area, according to a study released Tuesday by Arizona State University. The fallout from the statistic is significant: Home values are depreciating by double-digit percentages compared with a year ago.
The ASU Repeat Sales Index shows an 18 percent decline in regional home values from April 2007 to April 2008.
“When foreclosures were 5 percent, they showed up a little bit in the data, but at 20 percent, that’s large enough where it is going to have a significant impact,” said Karl Guntermann, a professor at ASU’s W.P. Carey School of Business.
The April comparisons continue a downward trend that may be unprecedented in local real estate history. The 13 percent price drop between March 2007 and March 2008 is the first time the index recorded a double-digit decline in home values in the metro area.
Homes located in northeast Phoenix were especially hard hit compared with previous months with a drop in value of 10.2 from April 2007 to April 2008. The same area showed only a 4.3 percent drop from March 2007 to March 2008.
The best performing areas continue to be Chandler, Scottsdale and Paradise Valley, but home value declines still are steeper than in other major cities, according to the ASU report.