TEMPE, Ariz. (AP) — The dramatic rise in Phoenix-area home prices in the past year appears to be tapering off, according to an Arizona State University report released Thursday.
The median price for a single-family home in metropolitan Phoenix rose just 2 percent in June compared to May. Median prices reached $150,000, but that's just a $3,000 increase from a month earlier.
The median home price has risen 29 percent from last June's $116,000, but is still far below the $260,000 they reached at the market's height in 2007.
The increase is driven in part by a scarcity of existing homes for sale, said the report by Mike Orr of ASU's W.P. Carey School of Business. There are far more buyers than sellers in the market, inventory at the lower end of the market below $150,000 is down to less than 20 days' supply and many sellers are receiving multiple offers and selling for above the asking price.
Investors are buying up many homes for cash, freezing out average home buyers who need financing and appraisals.
The number of homes for sale in the greater Phoenix area without a sales contract was down to slightly above 9,000 on July 1. Nearly 80 percent of the houses were priced above $150,000. Supply was down by 33 percent from Aug. 1, 2011, to Aug. 1 of this year.
New home sales are up by 39 percent from June 2011 to this June, partly due to frustrated existing home buyers turning to new construction. New construction permits are also up by 49 percent.