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An Arizona State University housing report released Friday reveals that the home prices in the Phoenix rose 35.3 percent.

According to the Phoenix Business Journal, the monthly analysis showed that a $120,500 home last year increased to $163,000 by January (28.5 percent growth).

ASU real estate expert, Michael Orr, who authored the report, explained that price advances are certain to remain firm for the time being.

"Pricing is almost always weaker in January, but February signals the start of peak buying season that lasts until the end of June," Orr said in the report. "Make no mistake - prices are going to rise significantly during this period. There is nowhere else for them to go until a significant new source of active listings enters this supply-constrained market."

Nevertheless, Arizona still has hurdles to jump regarding pervasive shortages in the housing market. Orr noted that around 77 percent of the 13,093 listings on the Arizona Regional Multiple Listing Service cost over $150,000 on Feb. 1.

The report added that this shortage, particularly related to the market's less expensive homes, has consequently prompted a 12.8 percent decline in home sales since December.

"We still have a long-term supply shortage with only about 50 percent of the active listings (without contracts) that we would expect to see in a normal market," says Orr. "Consequently, the trend is for prices to continue to rise across most sectors. Most homes priced reasonably below $500,000 continue to attract multiple offers in a short time. Sellers are firmly in control."

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