Phoenix home prices show a small decrease – now an even better time to buy

Arizona State University came out yesterday with their ASU-Repeat Sales Index (ASU-RSI) results. Just a reminder that the ASU-RSI measures annual changes in average Phoenix-area home prices. I've blogged about the study on a monthly basis and you may remember that before August, the last negative showing was in March 2010. From March to August, prices have been flat or seen small increases.

The most recent study revealed a year-over-year decline (for the month of September) of just 4 percent in home prices. This is only the second consecutive month of declines and, as just mentioned, the year - overall - demonstrated much stability with small increases and declines throughout the year.

The main author of the study - Karl Guntermann - said in a statement issued by the University, "Because of the volatility in the housing market, it is hard to be sure this is the start of a new downward trend, but an accelerating decline next month might well confirm that to be the case." I agree with Guntermann in that two months of consecutive increases or declines do not necessarily create a "trend." A trend needs to be longer. That's why we report good news as "promising" and declines as "disappointing." Three months is a better indicator, as Guntermann suggests, though some people wish to see even longer stretches of consecutive data before viewing it as a trend.

But let's take a moment to look at the data.

• Average house prices from September 2009 to September 2010 saw a 4-percent decline
• This follows a 2-percent decline from August 2009 to August 2010
• Previous ASU-RSI reports revealed that house prices remained flat from July to July and experienced small annual increases in June, May and April
• The last negative showing was back in March 2010
• The median price for all sales included in the September index is predicted to be $124,900
• Since June 2009, median prices have fluctuated between $122,000 and $135,000

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