The housing market’s recovery is picking up steam in most neighborhoods across metropolitan Phoenix, according to the latest data for home values.
Three-fourths of all the region’s ZIP codes saw home values climb during the first nine months of this year, according to The Arizona Republic’s Valley Home Values report. Most of those jumps were in double-digit percentages.
At least 20 ZIP codes posted jumps of more than 25 percent. Most parts of metro Phoenix haven’t recorded home-price increases since 2007, when the crash was beginning.
Helping boost home prices has been a huge drop in the number of inexpensive foreclosure resales. Now, only 13 percent of all sales in the region are homes taken back by lenders for resale, compared with 50 percent last year.
Housing prices haven’t returned to the boom-period highs, but in some areas, prices have recovered to levels not seen since 2003.
The housing recovery is expected to continue throughout the year as long as there are enough buyers and sellers.
“I think the recovery is in full swing, although we may have a few little dips coming out of it, but nothing major in my opinion in this market,” said Matt Widdows, CEO for HomeSmart, a Phoenix-based residential brokerage. “There has never been a better time to buy with prices and rates as low as they are today. We probably won’t see this combination again in our lifetime.”
Here are some snapshots of price and sales trends in different areas of metro Phoenix:
Central Phoenix neighborhoods had some of the highest price increases.
ZIP code 85015, along the east side of Interstate 17 between Northern Avenue and Camelback Road, posted the biggest median-price increase so far this year: 45 percent. The area, near the northernmost leg of the light-rail line, has been undergoing redevelopment and attracting homeowners looking for affordable houses. The area’s median home price, with this year’s increase, is $90,500.
There are 15 Phoenix ZIP codes, ranging from the north to downtown, that saw prices increase more than 26 percent.
“I have seen a tremendous amount of activity in the north Phoenix-Desert Ridge location,” said Diane Watson of Russ Lyon Sotheby’s International Realty.
Foreclosure resales fell in most Phoenix neighborhoods, helping boost prices. Even so, investors, who bought up many foreclosure homes, are still active.
Dario Catrundola, who lives in Ontario, Canada, is investing in metro Phoenix homes and so far he has purchased two houses. He is looking for more.
“Phoenix’s housing market went through a real slump, but it looks like it’s doing better than other areas of the U.S. now,” he said. “I like Arizona. I hope to retire and move into one of my homes there at some point.”
He said a $200,000 home in metro Phoenix would cost $600,000 in Ontario.
Home values generally have risen in north and central Scottsdale and northeast Phoenix, but by widely varying degrees.
The 85250 neighborhood, near downtown Scottsdale, experienced the city’s biggest jump in home prices: 24 percent. The area is also one of Scottsdale’s more affordable neighborhoods.
On the other hand, the 85377 ZIP code in Carefree took one of the biggest dives in home prices. The median in the area fell by 15 percent, to $501,000. Other municipalities, such as Paradise Valley and Fountain Hills, saw median prices climb only slightly.
Watson said Carefree is an unusual area because all of the houses are very different, and prices are high so the community isn’t attracting investors.
There were healthy 9 percent gains in median prices in northeast Phoenix’s 85254 and north Scottsdale’s 85255.
Real-estate agent Megan Schaff of the Halle Group of Keller Williams Realty said the competitive price range, where bids get brisk, for northeast Valley homes has moved up this year from around $100,000 to between $250,000 and $300,000, and there are fewer distressed properties.
She said she carefully tries to tailor an offer for a home to make it the most attractive to the seller. That paid off when one of her buyers beat out 17 others for a property.
Schaff also said she is seeing fewer foreign investors.
“It’s getting harder to buy a house and flip it,” she said. “You’re not finding the kind of return you would have found a year ago.”
Three of Glendale’s ZIP codes — 85304, 85303 and 85306 — saw home values climb more than 20 percent through August .
All of the neighborhoods are in north Glendale, near Arrowhead Ranch, an area with higher-income residents.
The Surprise ZIP code of 85378 was the other area in the northwest Valley to see home prices climb above 20 percent because it’s bisected by Bell Road, which has jobs and shopping. The neighborhood is surrounded by retirement communities whose prices didn’t take wing.
Home prices dropped in Sun City and Sun City West, which surprised housing analysts because the Valley’s retirement communities typically hold their values. However, the price declines were all below 7percent.
Jim Belfiore, president of Belfiore Real Estate Consulting, said he expects foreclosures in the West Valley and elsewhere to continue declining, which will help buoy home prices.
“There are fewer that are facing desperate situations,” he said. “The economy here is better and … there are more people employed than last year, and the years before that.”
Banks also have limited the number of foreclosed homes they put on the market.
“(Lenders) are increasingly selling these homes when they are in preforeclosure or immediately after they go delinquent as short sales,” Belfiore said. This saves the lender money compared with going through foreclosure proceedings.
The Mesa ZIP code 85207, near Superstition Air Park, posted the biggest price increase in the area this year, at 34 percent. Loop 202 bisects the southeast neighborhood, making it more accessible to residents.
More than half of all the new homes to go up in metro Phoenix this year have been in southeast Valley cities Mesa, Chandler, Gilbert and Queen Creek. Higher-priced new homes are driving up the communities’ overall median home prices.
Tammy and George Simbles recently moved back to the Valley from Austin and bought a new house in the Whispering Heights community in Chandler.
“We knew we wanted to be in the Gilbert school district,” said Tammy, who was unpacking their new home last week. “We looked at existing homes, but none met our expectations. We needed space and a game room for our boys,” she said. “We got all of that and still paid less than we did for our Austin home.”
Foreclosure resales have also fallen dramatically in the southeast Valley. Only 6 percent of all sales in Chandler/Sun Lakes were homes being resold by lenders.
Home prices in some of the West Valley’s most affordable neighborhoods climbed the most.
In Tolleson’s 85353 ZIP code, the area’s median price jumped by 27 percent, to $109,450. Nearby, in Buckeye’s 85326, the median price climbed 24 percent to $99,000.
Southwest metro Phoenix is also drawing investors because of the area’s newer, lower-priced homes. It’s not clear what impact investors will have on the area’s home values.
Eleven of 16 ZIP codes in Pinal County saw home-price increases.
Queen Creek experienced the biggest jump in home values, with 29 percent through August.
However, foreclosure resales are still a big part of sales in Pinal. At least 40 percent of all sales are lender-owned homes. Pinal’s housing market continues to suffer more than other parts of metro Phoenix because the area is farther out and has attracted many homeowners who took out mortgages they couldn’t afford.
Most housing analysts agree housing prices will continue to climb in metro Phoenix but not at the same rapid pace as this year. If investors continue to purchase, it will boost sales and prices. But real-estate experts agree that metro Phoenix doesn’t need another huge increase in home prices similar to that of the mid-decade boom that led to a bust. If prices climb more moderately, it will help keep the housing market stable and ensure its continued recovery.
“The market is going in a good direction,” said Jim Sexton of RealtyONE Group. “I see prices rising in 2013 but not as much as this year, probably closer to 5 or 6 percent.”
Republic reporters Peter Corbett and Alyssa Lee contributed to this article.
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