Government Shutdown May Have Affected Phoenix Housing Market
It turns out that a partial shutdown of the federal government has consequences.
Arizona State University's W. P. Carey School of Business released its monthly report on the Phoenix-area housing market, and things weren't so hot last month.
The home values have been rising for months, but there weren't too many people buying last month.
Here's the statement from W.P. Carey's Center for Real Estate Theory director, Mike Orr:
"Since the beginning of July, the Phoenix-area housing market has cooled dramatically. The main change is a steep fall in demand, which we can see in the 12-percent drop in single-family-home sales activity just between August and September alone. Going forward, we anticipate a much slower rate of price appreciation than the furious pace we have witnessed over the last two years."
"The sudden weakness in owner-occupier demand since July is unusual and unexpected. Poor consumer sentiment and concern over the government shutdown seem to have accelerated the decline. We also have no government information available yet on new-construction permits because of the shutdown."
Although there were reports that the Federal Housing Administration would stop processing government-backed loans at the beginning of the government shutdown, that turned out to be untrue.
So, the suggestion from the W.P. Carey School's report is, "Poor consumer sentiment and concern over the government shutdown seem to have accelerated the decline [in demand]."
Still, the median single-family-home price was clocked at $199,000, which is well above where it was two years ago, at $150,000.
And on the higher end of the scale, it looks like things are going just fine:
The situation has changed dramatically from September 2012 when the luxury market was 39% smaller than the low end market in terms of dollars spent. In contrast 56% more dollars were spent on homes over $500,000 in September 2013 than on homes under $150,000. However, this is partly because many homes that were valued at less than $500,000 in 2012 are now priced over $500,000. Similarly, many homes that would have been under $150,000 last year are now priced well over 150,000.
Click here to check out the monthly report.
Get the Weekly Newsletter
Our weekly feature stories, movie reviews, calendar picks and more - minus the newsprint and sent directly to your inbox.