(KFYI News) – After a couple of years of quick rises in home values, real estate values have plateaued and in some cases fallen slightly.
The latest report from ASU's W.P. Carey School of Business shows that from December 2012 to December 2013, the median single-family home sale price rose 25%. However, all of that increase happened during the first six months of the year. Since then, demand for homes has fallen sharply, bringing the rapid rise in home prices to a screeching halt.
Mike Orr, director of the Center for Real Estate Theory and Practice at the Carey School, thinks prices will stay pretty steady for a while. "I think we've reached a price point right now that is quite natural," he says.
That is, it appears to be the point where home prices should be, where supply and demand will be about equal. "If you took the pricing as of the 1999-2000 era and applied the consumer price index to it, you'd end up roughly where prices are right now," Orr says.
The exception is when it comes to rentals. Orr says the market for rental houses is still strong, indicating rents may continue to rise. "The younger generation is not participating in home purchases as much as previous generations. They're preferring to rent," he says.
Real estate values topped out in 2006, when the median home price in the valley reached about $260,000. The median value fell during the recession to a low of about $110,000, and has recovered to around $205,000.