A new survey from Zillow.com is projecting that metro Phoenix home prices will rise 3.6 percent by April 2015. That’s not a significant increase compared with the 17 percent rise last year and the 30 percent jump in 2012.
Phoenix ranks 15th for projected home-price appreciation on Zillow’s list of large metros. Las Vegas, which has lagged the Valley in the housing rebound, ranks No. 1 with an almost 11 percent expected jump in home values.
Housing analyst Mike Orr, who tracks home sales daily, isn’t a fan of forecasting home prices several months out on sales that haven’t even been started.
“Zillow’s forecasts are for entertainment purposes,” said Orr, of Arizona State University’s W.P. Carey School of Business. “Zillow is not predicting changes in home prices. They are predicting changes in their own Zestimates.”
The Zestimate is Zillow’s estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home’s value and is not an official appraisal. The Zestimate is automatically computed three times per week based on millions of public and user-submitted data points, according to Zillow.
Orr said the Zestimate for his house has gone up and down during the past year for reasons that can’t be explained by what’s going on in the housing market.
Tom Ruff, real estate analyst with the Information Market, said a 3.6 percent increase for Valley home prices this year is “plausible” but said Zillow has been “wildly inaccurate” in forecasting future home prices.
Greg Burger, an Arizona housing expert with RL Brown Report, said a 2 to 2.5 percent increase for home prices is more realistic than 3.5 percent.
Scottsdale-based real estate agent Diane Brennan, who hosts “That Real Estate Show” on KTAR radio, believes prices might be stagnant this year or even dip a little.
“If sellers have to move their homes, they’re going to have to drop prices,” Brennan said. “Keep in mind though, we have a lot of overpriced properties on the market.”
Metro Phoenix’s median home-sales price fell in January and February but bounced back to December 2014’s level of $205,000 in March.
Orr’s report on April sales prices will be released in the next few weeks.
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