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Low inventory, competition help drive up Valley home prices

TEMPE, Ariz. – Valley home prices were on the rise in May.

“My favorite measure is the average price per square
foot,” said Michael Orr of Arizona State University’s W.P.
Carey School of Business. “That’s up 22.2 percent over the
year. The median sales price of a home is up 32.4 percent
from $111,000 to $147,000. That’s for the combination of
Maricopa and Pinal Counties.”

Orr said competition to buy a home is tough. The number of
homes for sale in the Valley has dropped 50 percent from
May 2011. There’s about 8,550 homes for sale in the
Valley, with investors competing with people wanting to
buy a house to live in.

Orr said it’s not unusual for a home for sale to get
multiple offers.

“The highest one I’ve seen so far is 95 contracts on
single home in Glendale that was priced at a $120,000,” he
said. “It eventually sold for $140,000.”

Orr said prices are especially bouncing back in some less
expensive areas of the Valley.

“San Tan Valley is up 35 percent over the last 12 months
in terms of price per square foot,” said Orr. “Tolleson is
up 31 percent. Phoenix as a whole is up 28 percent. That’s
a pretty respectable number, but a lot of that is in the
cheaper parts of Phoenix, particularly in the west and
south side.”

The summer months are usually slower for Valley real
estate. Orr predicted prices will stablelize between now
and September.