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Updated Oct 21, 2013 - 9:12 am

No bubbles in Valley real estate forecast

That's what a new report from Arizona State University is telling us.

Michael Orr, Director of the Center for Real Estate Theory and Practice at the W.P Carey School of Business at ASU released his April 2013 report for the Valley on June 5.

Even though prices have been dramatically gaining in the Valley, the report stated the greater Phoenix housing market is not in danger of a bubble.

Here are some other points of interest in the report.

• Housing market remains dominated by a chronic supply shortage.

• Number of active listings has declined still further since last month and the shortage continues to get more severe among the most affordable sectors.

• Higher prices would normally encourage more ordinary home sellers to enter the market but it seems many potential sellers are either locked in by negative equity or are on the sidelines waiting for prices to rise further. At some point, we will reach a pricing level where re-sale supply will free up, but it seems clear we are still not there.

• Strong demand from investors is slowly subsiding to be replaced by demand from owner-occupiers and second home buyers.

• For now it looks like developers will probably build fewer than half the homes necessary to keep pace with current population trends.

• Although large price increases have been occurring for well over a year now, appraisals are still a problem area, preventing some transactions from completing. The appraisal industry often has a difficult time allowing for three-month price change of 9 percent as we just saw over the last three months.

Listen for more Phoenix real estate news with realtors Diane Brennan and Rod Lakin on That Real Estate Show Saturdays at 3 p.m. on News/Talk 92.3 KTAR.

About the Author

Diane Brennan hosts That Real Estate Show on KTAR Sundays at 8 a.m. Before her career in real estate, you could hear Diane reporting the news and co-hosting for several years on KTAR. Her lengthy journalism career spanned the U.S and Canada before she turned her love of real estate into a full-time endeavor. Diane is a Realtor with Berkshire Hathaway Home Services and a dual citizen. She started building her business by helping Canadians and other foreign buyers purchase real estate during the sharp down turn in the Phoenix area market. Today, she helps buyers and sellers all over the Valley with their real estate needs. Her dedication to continued real estate education has earned her the designations of Master Certified Negotiations Expert, Certified Luxury Home Market Specialist, Certified Military Residential Specialist and Certified Scottsdale Real Estate Specialist.


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