Median sale price data from Metro Phoenix show 60% up from lowest
The latest median sale price data from Metro Phoenix area touched a record high of 60% when it scored $181, 399. The hike was calculated against its lowest score, which was on August 2011.
Despite the rise in housing price reminded many of crash of the real estate bubble, analysts are optimistic. Mike Orr, a director at the W. P. Carey School of Business of the Arizona State University, assured that the area won’t see a housing bubble develop anytime soon.
‘We successfully predicted this rise for the main seasonal buying every year, which remains strong until June,” confirmed Orr, director of the Center for real Estate and Practice.
He explained the rise in price as a consequence of lesser house availability. The number of listed houses fell by a sharp 7.3% in April.
In purview of the rapidly escalating home prices every where, some market watchers fear an over-supply bubble when investors who bought foreclosed and short sold homes enter the market after maintaining the home as a rental for some time.
Rubbishing the claims of bubble, he said, “Some commentators ominously promote the idea of a bubble because of their fixation and fear about the events from 2004-2006. Even the idea of an over-supply bubble is exaggerated.” Orr seemed confident.
According to him, even if all the foreclosed and short sold homes enter the market, it would only rise by 10-11,000 more, and that would not mitigate the undersupplied nature of the market in the Valley.
The recent steep hike in mortgage interest rates is also emerging as a context of serious concern for some commentators and prospective home buyers.
Orr explained this as sometimes a steep hike in rate may cause urgency in home buyers before they want to lock the mortgage before it gets any higher. This therefore creates a hike in demand instead of decreasing it.
He forecasts continued escalation of the sale price in the Metro phoenix region, albeit at a softer pace.