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Arizona home prices are dropping faster than ever

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PHOENIX — Home prices in Arizona are dropping faster than ever.

Figures Thursday from the Office of Federal Housing Enterprise Oversight show the value of an average home in the state slid 5.5 percent in the first quarter of this year compared with the same period a year earlier.

That means a home that was worth $200,000 a year ago is now valued at $189,000.

That's the fourth-biggest drop in the nation, and the largest for Arizona since the federal agency began reporting numbers in 1985. It compares with a drop of less than one-tenth of 1 percent nationwide.

But as bad as things are in Arizona, they're worse in three other high-growth states.

Florida homes lost more than 8.1 percent of their value, year over year. The decline was 10.3 percent in Nevada, and it was nearly 10.6 percent in California.

Neighboring states in the Southwest region, however, actually posted year-over-year increases in home values, despite overall market conditions. Prices were up 2.3 percent in Colorado, 3.4 percent in New Mexico and close to 5.6 percent in Utah.

Patrick Lawler, the federal agency's chief economist, said one reason is the number of unsold properties.

"The large overhang of real estate inventory awaiting sales continues to force price declines in many areas, but particularly in places that had seen very sharp appreciation in previous periods," he said in a statement.

Much of the decline in Arizona occurred just during the last three months when home values dropped nearly 2.8 percent.

The agency's figures are considered a significant indicator of the long-term trends in the value of homes.

It has been tracking average price changes in repeat sales and refinancings of the same single-family properties, using statistics from mortgage transactions. By contrast, other indicators generally are based only on the homes that actually were sold in each quarter.

Changes in value were not uniform throughout Arizona.

Prices in the Phoenix metro area were down almost 6.7 percent from the same period a year earlier, with a nearly 3.3 percent drop in just a single quarter.

But that paled in comparison with home values in Mohave County, along the California border, which posted a 9 percent drop during the year and 4 percent in just the quarter.

And Yuma values are down more than 5.4 percent in the last year.

By contrast, year-over-year values are down 2.9 percent in the Tucson area, with a single-quarter 2.0 percent drop.

Yavapai County home values slid close to 3.8 percent from the same period last year, with a 1.8 percent drop in the Flagstaff area.

Despite the recent sharp declines, those who purchased homes in Arizona five years ago are doing better financially than counterparts in many other states.

The federal agency puts Arizona home values up more than 72 percent from the same period five years earlier, compared with a 56 percent increase in California, more than 63 percent in Nevada and less than 39 percent nationwide.

Longer term, however, the record is more mixed.

An Arizona home bought in 1980 has appreciated more than 307 percent. That's more than the 267 percent increase in Nevada but less than the 469 percent change in California.

Nationwide, the change since 1980 is approximately 288 percent.