Some U.S. cities are experiencing booming housing markets that could turn to busts, but those conditions do not exist yet in Arizona.
May 7, 2005 (Press Release) --
No Arizona cities meet the Federal Deposit Insurance Corp.'s list of boom markets - those showing 30 percent total price gains, inflation-adjusted, over the past three years.
FDIC officials are keeping an eye on real estate conditions. Booms could turn to busts, imperiling the banking system, which the FDIC regulates. Arizona home prices rose about 30 percent on average from 2002 through 2004, according to numbers from the Office of Federal Housing Enterprise Oversight that the FDIC used in its study. But after inflation, the three-year gain was closer to 21 percent.
The report emphasizes booms usually don't turn to busts but instead typically are followed by several years of stagnation, as economic fundamentals catch up to prices.
However, the report also notes real estate price cycles might behave differently in the future because of the expansion of subprime lending, mortgages with lower down payments and the growing use of equity lines of credit.
The FDIC report was greeted with mixed responses from Arizona observers.
William D. Hinz II, president and chief executive officer of Western National Bank in Phoenix, doesn't think the Valley housing market is vulnerable to a slump because buyer demand, driven by population inflows, continues to soak up new units. A growing inventory of unsold homes would be a warning sign, Hinz said.
According to a national survey released Thursday, about 40 percent of consumers think it's somewhat or very likely that housing prices could drop sharply in their areas within the next three years.
The Property Professionals are a FULL SERVICE property management company. It does not matter whether you are across town or across the country you can feel confident that they will manage your property as if you were living next door. For more Real Estate investment information investors can visit its web site at www.phxpp.com.
FDIC officials are keeping an eye on real estate conditions. Booms could turn to busts, imperiling the banking system, which the FDIC regulates. Arizona home prices rose about 30 percent on average from 2002 through 2004, according to numbers from the Office of Federal Housing Enterprise Oversight that the FDIC used in its study. But after inflation, the three-year gain was closer to 21 percent.
The report emphasizes booms usually don't turn to busts but instead typically are followed by several years of stagnation, as economic fundamentals catch up to prices.
However, the report also notes real estate price cycles might behave differently in the future because of the expansion of subprime lending, mortgages with lower down payments and the growing use of equity lines of credit.
The FDIC report was greeted with mixed responses from Arizona observers.
William D. Hinz II, president and chief executive officer of Western National Bank in Phoenix, doesn't think the Valley housing market is vulnerable to a slump because buyer demand, driven by population inflows, continues to soak up new units. A growing inventory of unsold homes would be a warning sign, Hinz said.
According to a national survey released Thursday, about 40 percent of consumers think it's somewhat or very likely that housing prices could drop sharply in their areas within the next three years.
The Property Professionals are a FULL SERVICE property management company. It does not matter whether you are across town or across the country you can feel confident that they will manage your property as if you were living next door. For more Real Estate investment information investors can visit its web site at www.phxpp.com.
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