Valley's home market No. 1

The article, Valley's home market No. 1, from the Arizona Republic, reports that home prices in the metro Phoenix area rose 55.2 percent from September 2004 to September 2005, according to a report released by the National Association of Realtors, the largest increase in the nation. Nationally, home appreciation reached 15 percent for the September 2004 to September 2005 period. The article states that the biggest home price run-ups are behind us, as evidenced by a slight sales price drop in October, more homes on the market, and rising interest rates. "A lot of sellers don't get it yet, but Phoenix is in a transition period," said David Lereah, chief economist for the N.A.R. He and other housing analysts are not calling for metro Phoenix home prices to continue to deflate. The consensus is for housing appreciation to level out as the number of homes on the market continues to climb, giving buyers the upper hand. "The air is starting to come out of the national housing balloon, but Phoenix has a good job market and strong in-migration, so it won't experience a bubble bursting," said Lereah. The article states that the big price increases over the last year can be attributed to investors, move-up buyers, new residents, second home buyers and first-time buyers all trying to get a piece of the action. Jay Butler at ASU states "The Valley's housing market couldn't keep going at that pace. The cooling is a good sign." John Foltz, president of Realty Executives, is forecasting home prices to climb 5 percent to 10 percent next year.

But big price increases likely thing of the past

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