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Lilly Filippi, 7, pets two little dogs through a fence as her mother Vicki Filippi, center, checks out a house for sale being shown by Noy Kelly of Long Realty. Experts say the drop in housing prices gives house hunters a better chance at affording them; A $200,000 home three months ago might now go for $199,420.
Benjie Sanders / arizona daily star
What goes up …
Percent change in housing prices:
Last Prior quarter quarter 1 yr 5 yr
Nation 0.08% 0.45% 3.19% 50.76%
Arizona -0.29 0.13 2.20 90.78
Tucson -0.07 0.01 2.20 79.07
Flagstaff 0.55 0.25 3.79 96.12
Lake Havasu/ Kingman -0.28% -0.52 0.17 107.28
Phoenix metro -0.46 0.00 1.57 93.43
Prescott -0.42 0.20 4.24 91.69
Yuma N/A N/A 1.34 91.16
Source: Office of Federal Housing Enterprise Oversight

Tucson Region

Arizona home prices drop for the first time in 16 years

Good news for buyers, but costs are expected to inch up within year
By Howard Fischer
Capitol Media Services
Tucson, Arizona | Published: 08.31.2007
Housing prices in Arizona officially waded into the red last quarter — the first time that has happened in 16 years.
New figures Thursday from the federal Office of Housing Enterprise Oversight show that home values in the state dropped nearly three-tenths of a percent in the second quarter of this year compared to the prior quarter. The last time the state dipped into negative numbers was in 1991.
Tucson home prices dropped 0.07 percent in the second quarter.
And the normally booming Arizona housing market is so cold that prices could not even keep pace with the national average, which actually went up a tenth of a percent in the same period. And that figure was the smallest hike since 1994.
Put in real dollars, that decline means a home that was valued at $200,000 three months earlier now is worth $580 less.
"Now is the ideal time to buy because we are seeing prices lower than they have been in a long time," said John Strobeck, owner of the Tucson based Bright Future Business Consultants. "They won't stay as low as they are now. … I would say that within a year we will see prices inch back upward."
Noy Kelly, a real estate agent for Long Realty in the Tucson area, agrees that this is an opportune time to buy a home.
"We are in an area where economically it makes more sense to have homes become lower in value pricewise so people can still afford them," Kelly said. "This will have a large impact and will help turn the market into a safer place for people to buy homes."
Strobeck said the decrease in prices makes perfect sense.
"We see prices being pushed downward because demand is low," he said. "It is low because everyone bought homes in 2005 and at that time, investors came into the market and pushed prices way up. What we are doing now is adjusting back to where we should be."
The statistics reflect how much the values of existing homes have gone up — or down. The agency tracks average price changes in repeat sales and refinancings of the same single family properties, using statistics from mortgage transactions.
As bad as these statistics are, the numbers could get worse.
James Lockhart, the agency's director, said the new report reflects prices only through June. He said the more recent instability in the mortgage market could affect housing prices, with the results showing up in the third-quarter figures that will be released at the end of November.
Even with the quarterly decline, Arizona did manage to post a 2.2 percent increase in home prices over the same period a year earlier. But here, too, the state lagged the average national increase of 3.2 percent.
And some states did much better than others.
Neighboring Utah managed to post a gain of nearly 2.7 percent for the quarter — and close to 15.3 percent for the year. And New Mexico came in fifth in the nation for annual home value increases at 8.8 percent.
But Arizona's other two neighboring states fared worse: California home prices are down almost 1.4 percent from last year; Nevada prices are close to 1.5 percent lower.
On StarNet: What are homes selling for in your neighborhood? Find out at azstarnet.com/homes.
● Star reporter Alexis Huicochea contributed to this story.
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