Metro Phoenix Real Estate Appreciation Trends   by Eddie Perez-Ruberte

After the very exciting Phoenix real estate markets we’ve had the last few years, I find myself answering the same questions over and over:

* What is the market doing?
* What do I think the market is going to do?
* Where are prices stagnant, falling or increasing?
* What’s the best place to invest in Phoenix real estate these days?

So, in an attempt at a systematic approach to answering these and other lingering questions from my clients, friends and acquaintances, I have decided to prepare a report and write this article. It is by no means a set of fixed rules the reader must follow, but rather a few guidance points that will hopefully enlighten the reader’s view of the current real estate market as well as his/her real estate investment career.

I will begin by giving the reader just some raw numbers that will hopefully help putting the rest of the analysis into perspective.

During 2006, there were 61,055 single-family-home re-sales. The average sale price throughout the year was $362,093. There was very little change throughout the year, starting at $369,000 in January and ending at $359,000 in December. This should come as no surprise, since we knew 2006 was going to be a correction year.

The rest of the analysis divided the whole Phoenix Metro are by zip codes and the main findings are summarized below:

* For an average sale price of $300K and under, Phoenix, Youngtown and Sun City topped the list of appreciating zip codes in the following order:

Zip Code City/Town % Appreciation
85020 Phoenix 38%
85021 Phoenix 24%
85363 Youngtown 16%
85009 Phoenix 15%
85373 Sun City 13%
85008 Phoenix 12%
85013 Phoenix 12%
85033 Phoenix 11%
85035 Phoenix 10%

I advise you to not start jumping up and down and putting all your money in these zip codes, however. A month-by-month analysis showed a lot of saw-tooth (peaks and valleys) behavior. You can find a more detailed chart on my full report. However, the numbers do show a steadier upward swing in sales price for these zip codes.

* For those interested in sale price of between $300K and $500K, Phoenix, Mesa, Scottsdale, Glendale, Surprise and Avondale made my list of highest-appreciating zip codes in the following order:

Zip Code City/Town % Appreciation
85042 Phoenix 22%
85205 Mesa 14%
85251 Scottsdale 12%
85310 Glendale 11%
85379 Surprise 10%
85257 Scottsdale 9%
85323 Avondale 9%

Again, the saw-tooth pattern was observed at this price range, but distinct upward trends can be appreciated.

* Finally, for an average sale price of between $500K and $750K, Scottsdale, Goodyear, Queen Creek and Gilbert made it here in the order below:

Zip Code City/Town % Appreciation
85259 Scottsdale 15%
85338 Goodyear 7%
85242 Queen Creek 6%
85254 Scottsdale 6%
85296 Gilbert 5%

As in the previous price points, a lot of saw-tooth behavior going on here. Appreciating trends can still be observed, but they are less marked.

So, what is the data telling you as an owner or potential buyer of single-family homes in the Phoenix area?

1. The first thing it is telling us should be no surprise to people who have been following our real estate market: 2006 was a period of transition and adjustments. The “saw-tooth” pattern observed is a dead giveaway.

However, where there opportunities and appreciating markets?

YES, THERE WERE! And THERE STILL ARE!

2. A big thing these numbers are telling us is that the bottom did NOT fall off. Even with the oscillations, average prices remained strong, either hovering around the same value at which they started or inching upward a bit.

And remember: these are average numbers. Each investor or buyer’s particular style/approach will produce different results. This is only a guideline to which you may want to refer to get an idea of how our market is behaving, how our Valley is growing and where.

To get your FREE copy of the detailed report I wrote for my clients, complete with tables, charts and my own personal pick of where the growth is and will be for the next few years, please visit <http://www.ValleDelSolRealEstate.com>

About the Author

Eddie Perez-Ruberte is a succesful real estate agent and investor in Arizona. He also has worked for big multinational companies in the fields of Aerospace and Mechanical Engineering and Manufacture. He holds a BS in Mechanical Engineering from the University of Puerto Rico and a MS in Aeronautics and Astronautics from Purdue University in Indiana.
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