The Arizona Republic
May. 13, 2007 11:34 PM The standoff between home buyers and sellers in metropolitan Phoenix could be nearing an end.
The wide gap between what a home is listed for and what it sells for is shrinking, which means Valley home sales could start to pick up if more buyers and sellers agree on prices.
Real estate analysts say it’s an early sign the ailing housing market could be on the road to recovery.
“Both buyers and sellers are readjusting their expectations,” said University of Arizona economist Marshall Vest. “Buyers are coming back into the market with reasonable offers. More homeowners are pricing their homes to sell.”
Vest analyzed data from the Arizona Regional Multiple Listing Service and found that the spread between what Valley home prices sold for in March and what they were listed for is the narrowest it has been since mid-2004. The gap hit a high in mid-2005.
Valley home listings recently hit a new high of 50,000. But housing-market watchers say many of the listings are sellers who put their home on the market last year based on price run-ups from a few years ago. Those houses are languishing on the market with little chance of selling for the listed prices.
Some sellers are taking note.
Thomas Herz realized there was a glut of homes for sale when he decided to sell his central Phoenix home earlier this year. He originally wanted to list it for $340,000, the price he believes his home is worth now. But Herz didn’t want to wait months while it sat on the market and then have to go through the process of lowering his price one or more times. He and his real estate agent watched as the comparable sales in his neighborhood started coming in lower.
“After watching what was going on with the market, I wanted to list it at $319,000 but decided to go with $314,900, hoping it would sell faster,” said Herz, who put his three-bedroom home in the Woodlea historic district on the market a few weeks ago. “Two years ago, homes like mine were selling in the high $300,000s. This house is a great deal for someone.”
Buyers and sellers should watch carefully what is happening in their areas now and not base prices on sales a few miles away or on the other side of the Valley. In some parts of metro Phoenix, houses are going for the full asking price. In other parts, particularly on the fringes, buyers have more negotiating power.
“Home prices need to be looked at neighborhood by neighborhood now,” said Wayne Miiller of Century 21 Arizona Foothills.
In 2005, Valley home prices climbed 50 percent. Since then, prices have been flat in most neighborhoods or have dropped.
“People are realizing this isn’t a fad,” said Margie O’Campo de Castillo of Arizona Dream Realty. “Listing prices have to come down for homes to sell, and buyers have to be realistic. It’s good to see it finally happening.”