PHOENIX -- The Valley housing market is hitting a point of stagnation because of a lack of demand, an Arizona State University professor said.
W.P. Carey School of Business professor Michael Orr said weak demand is causing potential sellers to cancel their listings.
"We've really got low demand from people who would normally be buying their first home."
Demand is down 20 percent from a year ago, while single-family new home construction and sales are 65 percent below normal in the Phoenix area.
Despite the lack of demand, the median single-family home sale price is up to $205,000, an ASU housing report said.
"Exactly a year ago, it was $185,000, so it's actually gone up 11 percent since then but that's actually falling quite fast," said Orr, who expects the tide to start turning in the spring.
"I think the rest of this year is going to remain relatively quiet and not see any dramatic changes."
Sales of townhomes are down 20 percent from May 2013. Sellers also appear to be waiting to list their homes until buyers have a greater sense of urgency.
Orr believes families are choosing to stay in their homes longer than they did 10 to 15 years ago. They may be stuck with negative or little equity in their homes or they may want to stay to keep their low mortgage interest rates.