Buying a home in Arizona might be less expensive this year than it was last year, but buyers are still keeping their checkbooks in their pockets as a weak housing market continues to slip.
The median sales price of homes in Arizona in March was recorded at $220,000, which is 4.3 percent lower than the median price in the beginning of this year and 17.1 percent lower than last year's median home price of $265,470, according to an ASU Realty Studies report released last week.
The decrease of home prices may be a factor in the increase in Arizona home sales for the month of March. Last month, 4,335 homes were sold, compared with 3,750 sales in February and the 3,350 sales in January.
But March's sales are 19.5 percent lower than last year's March sales and were the lowest in March since 1996, when there were 3,270 sales.
The number of total sales for 2008 is also 19.7 percent lower than last year's sales total at this point, according to the report, compiled by the Morrison School of Management and Agribusiness at ASU's Polytechnic campus.
March is normally one of the key indicator months for the upcoming home resale period, said Jay Butler, the director of ASU's Realty Studies report.
"March sales were expected to be higher than February," Butler said. "So it did what was expected, but it didn't do as well as what was hoped for."
Currently, the weak U.S. economy is plagued by high gas prices, increasing grocery costs and job instability, which have made people more conservative with their money, Butler said.
"If the cost for people to eat, drive their automobiles and live their lives is going to keep increasing, then people are going to have to pick up extra money from somewhere else," he said. "This is really making potential buyers want to sit on the sidelines. They are going to be more reluctant to pick up their money and spend it."
Business senior Ben Lipkin, who currently owns four houses in the Valley and rents out three of them, said the economy is one of the main reasons the housing market is in a downturn and doesn't look to pick up anytime soon.
"I don't feel the real estate cycle will get back on track for another year or so," Lipkin said. "Everyone is holding out or they don't have the money to buy a house."
Students will have a tough time buying a house because most loans are requiring 20 percent down unless they have good credit, Lipkin said.
"Banks and loan companies have made it harder to receive loans because of recently passed laws and all of the foreclosures," Lipkin said. "If you don't have a really high credit score, you will have to pay a high down payment. A lot of college students won't be able to afford that."
Though plenty of houses are available and affordable, April doesn't look to be a strong month for housing sales, Butler said.
"I suspect we are still going to be slow," he said. "We might see some slight improvements, [but] this weak economy is sort of changing everyone's outlook."
Reach the reporter at: ryan.calhoun@asu.edu.
