How Low Will It Go???

Home prices may dip 10% as fear grips Valley market, from the Arizona Republic, reports that some economists and housing analysts are saying that the housing market slowdown may continue for the next six months, possibly pulling down home values as much as 10 percent before it's done. No one is calling for the Valley's housing market to crash as it did in the 1990's because the rest of the area's economy is so strong now. "An adjustment in the Phoenix-area real estate market will be painful," said national housing analyst Barbara Allen of Avondale Partners. "The good news is because of Phoenix's continued growth, the market won't need to go down that much more to adjust." The concerns revolve around the number of homes currently on the market, the investor impact, higher mortgage rates and home prices. The good news is that metro Phoenix is expected to add 100,000 jobs and 135,000 new residents this year. In 2003, 3.2 percent of all Valley homes were on the market. Now it stands at 3.6 percent, so its getting back to the normal market conditions we saw in 2003. We just need to burn through the existing inventory and the market will adjust.
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