Boom. That’s about the only thing you can say to describe the most recent Case-Schiller Index for Phoenix. Well, “boom” may be a poor choice of verbage. Boom as in “crash” or “falling fast and hard.”
The Case-Schiller Index, which keeps tabs of the resell home values showed a 26.5% decrease in prices from May 2007 to May 2008.
This, of course, is good news for buyers who love to see prices continue to fall - yet this keeps many buyers on the fence from moving forward with a purchase.
For sellers, it means they need to hire an agent who will be tough with them. By tough, I mean the REALTOR will tell them the current market facts and only take a listing that is in line with those facts. Let’s face it, there’s no point in wasting everyone’s time by giving in to a seller who thinks “their home is worth $10-, $20- or $100,000 more” than what the current market statistics (and ‘current’ means the last month of two and may include foreclosure sales) show. Not only is it a waste of time but of money for all parties involved - the REALTOR and the seller. Selling at the correct price means selling quicker and possibly at a higher price in the end. If a seller starts too high they’ll have to go through a series of price reductions before the price is at the current market - and the current market is often times, in Phoenix, going to mean selling for less than what they could have when they originally listed the home five or six months prior.
It’s important for sellers to understand that what their neighbor’s home - which may have been identical - sold for six months ago is irrelevant except to show which way the market is trending.
Hopefully we’ll see a leveling off of the Case-Schiller Index in the coming months. Buyers, if you plan on being in your home 5+ years and you plan on buying your home as just that - a home, then it may not be a bad time to buy as interest rates are still at historical lows but creeping up quickly as of late which could negate the fall in prices if rates continue to rise too much.
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