PHOENIX — It’s starting to look like Valley home prices aren’t likely to go up for the rest of the year.
For the second month in a row, the median price for a single-family home in the Phoenix area is sitting at just under $205,000.
Lower demand for homes is the reason. Michael Orr, director of the Center for Real Estate at ASU’s W. P. Carey School of Business, said that local home sales actually dropped 16 percent between April 2013 and one year later.
“We started slowing down from August onward last year,” Orr said. “We’ve now got to the point where the total number of sales for the year so far is the second-lowest since 1999.”
Orr said that two groups of people are driving the lower demand.
“One is those people who have been through a foreclosure or a short sale who have been locked out because of their credit being effected,” he said. “And then there’s the younger generation, particularly the Millennials between 20 and 30.”
Orr said the younger group is putting off a lot of major milestones until later in life, including buying a first home.
The supply of available homes in the Valley has increased of late. As of May 1, there were 73 percent more active listings in the Phoenix area than there were at the same time a year ago.
Despite the slowing of sales, Orr said that the Phoenix real estate market is healthy, and there’s little chance of a crash like that seen during the recession a few years ago.