Craig and Shannon Bohall bought an existing home in Mesa three years ago, and now they have an opportunity to move up to their first brand new home. Their house, near Baseline Road and Val Vista Drive, has five bedrooms, 3 1 /2 bathrooms and lots of amenities. They put their house on the market more than a month ago in hopes of a quick sale so they can close on their new home by mid-November.
However, the house hasn’t budged. It’s just sitting on the market day after day without drawing any buyer interest. The couple already has cut their asking price from $564,995 to $559,995.
“It’s depressing and frustrating because I probably am like 20,000 other people out there,” Craig Bohall said. “You have a beautiful home, there’s nothing wrong with it, but there just aren’t any buyers. And I realize that if I put a beautiful home on the market just like about 20,000 other people, and it’s not going to sell, why would anybody come look at mine just because it’s nice?”
The Bohalls have sweetened the deal by offering a free trip to Hawaii, a free big-screen TV and $10,000 cash to whoever steps forward and buys their house.
“We’re in a bit of a time crunch, and that’s why I thought instead of just giving an incentive like everybody does, like we’ll pay $3,000 worth of your closing costs, I said no, let’s make the incentive big,” Craig Bohall said.
The Bohalls aren’t alone in feeling trapped. The Valley’s home resale market continued slowing last month with the lowest monthly level of sales since February 2003, according to the Arizona Real Estate Center at Arizona State University’s polytechnic campus. Last month, resales totaled 4,875, down sharply from 9,815 in September 2005.
And for the first time in more than 10 years, the yearto-year median home price in the Valley fell, from $263,000 in September 2005 to $256,900 last month. Most median home prices across the East Valley also fell last month.
The Valley’s median price peaked in June at $267,000.
Last month was the slowest September for sales since 2000. Through September, there were 52,390 existing home sales this year, compared with 88,750 for the same period last year.
“A lot of it is the buyers aren’t out there,” said Jay Butler, director of the Arizona Real Estate Center. “The days of the big (price) increases are gone, at least for a while, so the buyer is very cautious about what they’re going to do. And of course most buyers have to be sellers also, so it creates another problem.”
Potential buyers can peruse home listings online and actually watch desperate homeowners slash their prices on a weekly basis, Butler said.
“What gets into your mind is, why would I buy now when in fact it may even go lower?” Butler said.
A recent forecast by Moody’s Economy.com, a private research firm, listed the Valley among metropolitan areas it says will experience a double-digit “peak to trough” decline in home prices.
The median home price in the Valley was about $274,000 during the first quarter of this year, and the median price is expected to drop about 10 percent, or about $27,000, by the first quarter of 2009, according to Moody’s Economy.com.
“It’s going to be a severalyear, very gradual decline over the next couple of years in Phoenix,” said Austin Litvak, assistant economist with Moody’s Economy.com. “As far as sellers go, it’s going to become harder to sell houses at their current median price level, and as they see a slackening in demand, they’re going to have to correspondingly bring down their asking prices.”
Stacey Atwell, associate broker and branch manager of Desert State Realty in Chandler, said now more than ever, pricing is everything if sellers want to attract buyers.
“It is the complete opposite of what it was when the market was a sellers’ market,” she said. “The buyers last year were saying, why do I have to pay $20,000 above price? That’s not fair. Well, do you want it or not? Now, the same thing goes for the sellers, saying why do I have to take $20,000 less than what I have it listed for? Well, do you want to sell it or not?”
Craig Bohall isn’t surprised by the slowing market and falling home prices.
“I just hope . . . the rare few buyers there are might come out and want to get some incentives if they’re going to buy a house anyway,” he said.