Sales of existing Pinal County homes continued a steady down slide in the first quarter of the year as sellers struggled to compete with builders and would-be buyers faced tightening lending standards.
Some 840 existing home sales were recorded in the first three months of 2007, compared with 1,110 in the same period the year before, a report by Arizona State University’s Realty Studies department shows. The median resale price hit $204,600, down from $220,000 at the end of 2005.
“The resale market is getting hammered both by the travel congestion issue and by the new home market down there,” Realty Studies director Jay Butler said.
Builders continue to offer incentives and slash prices as they whittle down speculative home inventories in areas like Queen Creek.
Ongoing traffic congestion and climbing energy prices also are major issues facing sellers in outlying areas.
Without the promise of substantial home price appreciation, prospective buyers will likely look for places closer to jobs in city cores, Butler said.
The Pinal County market did show some signs of improvement early this year with sales climbing from 210 in January to 345 in March. That uptick is typical for the post-holiday season, Butler said. The median price also improved slightly, rising from $191,500 in the fourth quarter 2006. Still, prices likely have farther to drop, Butler said.
With an increasing number of borrowers missing mortgage payments and entering foreclosure, worried lenders are tightening underwriting standards — doing away with 100 percent financing and requiring higher credit scores. Many people will find it tougher to qualify for financing, Butler said, while others will wait and rent until the market improves.