PHOENIX — The S&P Case Shiller index is how Wall Street tracks housing prices across the country, and newly released numbers show prices continue to fall nationally with a steeper decline in the Phoenix market.
The index shows that, for January, home prices fell nationally by 0.05% but are up nearly 4% year over year. In Phoenix, the index fell 1.2% and prices are now only up a sliver, 0.01% compared to the same time last year.
According to the index, a house purchased in Phoenix five years ago would have appreciated 76% during those five years.
A house purchased in January of 2022 has not changed in value — any gains made in 2022 now are gone.
In two decades, the housing market has experienced three periods of volatility, the worst of which occurred in the six-year period surrounding the Great Recession.
During that time, home values rose over 50% before falling in value by almost 40% annually.
The second period of volatility happened from 2012 to 2015 when prices saw a two-year run-up followed by a cooling-off period. The final period began in 2020 and the market is still showing signs the volatility is not over.
With year-over-year values slightly above zero growth, the question remains if home values will go negative.
Current trends say yes, and it could show up as early as next month’s update of the index. If it does it will be the first time in a decade that home prices will be negative year over year.
Phoenix area trends typically lead to national trends and are more aggressive. With housing prices still up nationally by 4% year over year it is more unclear if national prices will dip into negative annual growth at all.
Data from the housing brokerage site Zillow shows the Phoenix market is at the bottom of annual home value changes compared to the nation’s 20 largest real estate markets. It is joined by much pricier metros like San Francisco, Seattle, and Los Angeles. So far, Phoenix is posting a small 1% annual gain.
Other Arizona markets are faring better. Most southern Arizona metro home prices are up over 6%.
Northwestern metros like Flagstaff and Lake Havasu are seeing smaller increases similar to Phoenix.
