Part 1 discussed Queen Creek. A subsequent post discussed the "pre-boom" year of 2003 in that city to further illustrate it's rise and fall. The second city, as you may have guessed, is the Town of Maricopa. The city website says the current population is 33,000 residents. Let's start with a look at the last 6-months of sales data:
You can see by this data that the average price has dropped $30,000 over the last 6-months - but more significantly - it has dropped $23 per-sq ft. This link will tell you why $23 per-sq ft is more important to know than $30,000. Let's now look at prices during the height of the boom.
In the Town of Maricopa the peak occurred in September of 2005. Price per-sq ft was $148 and average sales price was $287,107. If you are still stuck on the fact that October 2005 recorded the highest average sales price:
- realize those houses were 114 sq ft larger
- go back to the last paragraph and click on the link about "price per-sq ft"
This means the price per-sq ft has dropped $78, or is less than half the value of the September 2005 peak. The price per-sq ft indicator becomes very clear when considering that the average "sold" home in April 2008 was 2,314 sq ft and $163,129.
Here are 2 ways to look at these numbers:
- April 2008's average house of 2,314 sq ft -- if valued at the boom price of $148 per-sq ft -- would have cost $342,472; that's a $179,343 difference in price
- September 2005's average house of 1,956 sq ft -- if valued at today's price of $70 per- sq ft -- would cost $136,920; that's a difference of $150,187
These numbers are much more dramatic than simply saying "the difference between the highest average price in October of 2005 and the current average price is $129,783." Simply stated, people can afford larger homes now that foreclosures have killed prices in this city.
The last part of this analysis is a look at the pre-boom prices. Since the boom was generally considered to have occurred in 2004 and 2005, we will look at the prices in 2003. The following chart was obtained from the Arizona MLS and is the sales data for the entire year:
Side note: This report was run for "single-family residences, townhomes, and patio homes (not condos or manufactured housing) that were at least 1,000 sq ft and sold for under $1,000,000 dollars.Why did I use these criteria? Because I do a monthly report for Realty Times that deals primarily with "price," and I prefer to exclude the really "high and low" numbers to achieve greater accuracy. These numbers are calculated in this manner.
The 84 homes that sold averaged 1,788 sq ft. The average price per-sq ft was $85. Current prices in the Town of Maricopa are now $15 less per-sq ft than they were before the boom.
This is a devastating example of what foreclosures can do. If there is any hope for current owners in this city, it is that appraisers compare "like to like" (see Part 1 and Part 2) In other words, "normal" sales to "normal" sales and "foreclosures" to "foreclosures." Right now that doesn't seem like much hope, especially considering there are few normal sales in this city. Foreclosures must dry up for this market to reverse itself.
Comments