Housing-price recovery hits new milestone

by J. Craig Anderson - Feb. 25, 2010
The Arizona Republic

The Valley's epic home-price slide reached another recovery milestone in January, the first month in nearly three years with a single-digit annual rate of decline, according to preliminary data from Arizona State University's Repeat Sales Index.

ASU professor Karl Guntermann said January's year-over-year decline of 9 percent continues a stabilizing trend that has been consistent for several months.

The rate was 17 percent in November, and preliminary figures indicate a 13 percent rate of decline in December, according to Guntermann.

"The slowdown in the rate of decline has been accelerating for several months," he said. "If the present trend continues, prices will level off later this spring."

An index of zero percent would mean home prices were roughly the same as they were a year earlier, Guntermann said.

That point appears to have been reached for foreclosed-home sales, based on preliminary data. Guntermann said November's annual rate of decline for foreclosed homes was 9 percent, and preliminary data show it falling to 2 percent in December and zero percent in January.

The index measures differences in the average price of selected homes that have sold multiple times. Its purpose is to provide the most accurate reflection possible of the actual market, and it is the same methodology used for the nationally popular S&P/Case-Shiller Home Price Index.

The median sale price for foreclosures continued on a steady decline that barely has budged in more than a year.

The overall median price for non-foreclosure sales in January was $155,000, compared with $160,000 in December and $166,000 in November.

The index does not correlate exactly with year-over-year price changes, Guntermann said, because there is a sort of reverse momentum built into the calculation that lowers the index if it's on the rise, and raises it if it's on the decline.

It has been dropping for a record 33 months since home prices peaked in mid-2006.

Still, Guntermann said that is likely to change within the next few months as prices bottom out and remain static or recover slightly.

Preliminary data show the median home price in January was $125,000, down from $133,000 in December and $135,000 in November.