Phoenix's Housing Market Comes Down to Investors...

As speculators go, so goes area housing market, from the Arizona Republic, reports that the future of metro Phoenix's housing market comes down to investors. Investors hyperinflated home prices in 2005 by at least 25 percent with their purchasing sprees, new research shows. And what they do this year will determine whether the Valley's housing market sags, keeps climbing or stabilizes. Forecasts call for everything from a 10 percent increase in Valley home prices, to a 10 to 15 percent drop."In a normal housing market without the froth that investors brought, Valley home prices wouldn't have climbed nearly as high," said Jay Butler at ASU. His research indicates that the median price for an existing home would have likely hit a high of $205,000 last year, rather than the $263,000 it peaked out at in September. "Phoenix is going to burn off some investors during the first half of this year," said John Burns, a national real estate consultant. "We will see how many investors can't hang on and need to sell. As long as a bunch don't start dumping, the market will be all right." Investors accounted for at least 25 percent of all Valley home buyers last year, according to property records and real estate agent reports. If investors slash asking prices to sell, there will be pressure on all Valley home prices. Valley home listings have climbed from a low of about 6,000 in February to 30,000 now. Prices dipped in some areas last year as the number of homes on the market increased.

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