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Prices, demand hold steady amid cooling market

BY REALTOR LISA BAKER Hunt Real Estate ERA

While the frenzy of the local real estate market has calmed over the last few months, prices and demand continued to hold steady in September.

The average number of days a listing spent on the market in Maricopa County increased very slightly, from 27.5 in August to 27.8 days in September.

According to The Cromford Report, 50% of sales closed in Maricopa County during September sold for over the listing price, decreasing from 53% of August sales, continuing a downward trend that started in June.

Even with this downward trend, the closing price per square foot increased for the third month, up from $258.61 per square foot in August to $262.14 in September.

The S&P/Case-Shiller Home Price Index, published Sept. 28, covers home sales from the second quarter of 2021. Phoenix ranks at the top of the list of cities with the highest appreciation rate at 3.32%, more than twice the national average of 1.62%. It will be interesting to see how the cooling of our market over the last few months affects the third quarter Case-Shiller HPI.

September saw 432 MLS listing sales closed in Glendale and 371 closed in Peoria. Today there are 229 active and available listings (not counting properties already under contract or pending close of escrow) in MLS in Glendale and 224 active listings in Peoria. That is 53% of one month’s inventory in Glendale, down from 63% last month, and 60% of one month’s inventory in Peoria, down from 64%. Maricopa County inventory is 74% of September’s closed sales, down slightly from 75% in August.

According to ShowingTime, the platform Realtors use to schedule most of the MLS showings, Peoria listings in the $200,000 to $399,999 range had an average of 14.29 showings per listing, increasing slightly from last month. Glendale homes in the $200,000 to $399,999 range saw a decrease in the average number of showings per listing from 15.6 to 11.20. Not all showings are scheduled through ShowingTime, so actual numbers are typically higher.

According to Freddie Mac, as of Oct. 14, National Mortgage Rates reported U.S. weekly averages of 3.05% for a 30-year fixed, 2.3% for a 15-year fixed rate, and 2.55% for a five-year ARM.

According to MLS statistics, 73.5% of Maricopa County buyers financed their home purchase in August, while the rest paid cash. Buyers using a conventional mortgage to purchase a three-bedroom detached house with two bathrooms paid a minimum of $225,000 in Maricopa County, $274,000 in Glendale, and $285,000 in Peoria. Conventional financing made up 75.4% of September financed sales.

In September, FHA buyers in Maricopa County paid a minimum of $238,085 for a detached home with three bedrooms and two baths. Peoria FHA buyers paid a minimum of $275,000, and Glendale FHA buyers

SEE MARKET PAGE 14

Inflation’s history in the U.S. is not very pretty

BY DR. HAROLD WONG Peoria Times Contributing Writer

Here are some recent headlines and key facts from recent articles: “Here’s why your food prices keep going up” by Laura Reiley and Alyssa Flowers in the Washington Post: “Compared to August, 2019, the Consumer Price Index for meat, poultry, fish and eggs has gone up 15.7%.”

“Social Security cost-of-living increase will boost benefits 5.9% in 2022 as inflation spikes” by Paul Davidson in USA Today. “This is the biggest annual increase since 1982.” “A key measure of inflation surged to a new 30-year high” by Anneken Tappe, CNN Business. “The price index tracking consumer spending — the PCE price index — was up 4.3% over the 12 months ending in August. That was a faster pace than July’s 4.2%. Inflation continued to run at the fastest pace since January 1991.”

There are two consumer items that really hit home for the average American household: the price of bacon and the price of gasoline. When I stop at Fry’s grocery store, the price of one pound of bacon is $7 vs. $5 one year ago. When one looks at the gasprices.aaa. com/?state=AZ website, the average price (of all blends) was $3.467 on Oct. 26 vs. $2.250 a year ago. For premium gas, it’s $3.986 per gallon on Oct. 26 vs. $2.789 a year ago.

A historical lesson if inflation continues to accelerate: In October 1973, Arab nations attacked Israel on Yom Kippur. They formed OPEC (Organization of Arab Petroleum Exporting Countries) and used an oil embargo as an economic weapon for the first time.

Within six months, oil had gone up from $3 per barrel to $12 per barrel and caused inflation the rest of the 1970s. The 1979 oil crisis was the “second oil shock.” Because oil is used heavily to grow, transport and dry food, the price of food increased substantially. The price of soy beans quadrupled to over $13 a bushel.

The U.S. experienced the worst of all worlds: “stagflation” — which is stagnating economic growth coupled with inflation. There was a three-year period where Social Security cost-ofliving annual increases totaled 35.4%, consisting of a 9.9% increase in 1979, 14.3% in 1980, and 11.2% in 1981.

Federal Reserve Bank Chairman Paul Volcker raised interest rates to the highest level in U.S. history: federal funds rate of 20%, prime borrowing rate of 21.5%, and a 30-year fixed-rate mortgage on a house was 18%.

It led to a serious recession with unemployment over 10%, the entire savings and loan industry going out of business, and hundreds of banks going bankrupt. There were cities in Texas where it took 10 years before housing values recovered to their previous levels.

Why did Volcker do this? The infla-

MARKET FROM PAGE 13 paid $300,000. FHA buyers made up 9.1% of financed purchases in September. Maricopa County VA buyers making a similar purchase paid a minimum of $285,000, Glendale VA buyers paid $357,000, and Peoria VA buyers paid $345,000. Home sales financed with VA loans made up only 6.7% of September financed sales.

The remaining financed transactions used other financing methods. For the week ending Sept. 26, 5% of Maricopa County sellers contributed to their buyer’s closing costs, the highest percentage reported since March 7.

At the other end of the market, the highest-priced home sale in Maricopa County last month sold in Scottsdale for $8.675 million. Peoria’s highest-priced home sold for $2.024 million. The highest-priced home sale in Glendale was $2.51 million.

If your finances could use some steadying, please know that you are not alone. Homeowners, tenants and landlords are encouraged to reach out to the Department of Housing and Urban Development’s (HUD) housing counseling program at 1-800-569-4287 or go to consumerfinance.gov/housing to find the assistance.

Lisa R. Baker is a Realtor and a community volunteer in the city of Glendale. She can be reached at me@ lisarbaker.com.

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INFLATION FROM PAGE 13

tion of the 1970s, started by the OPEC oil embargo of 1973, led to seriously high inflation that eroded the value of savings, and normal families struggled to buy necessities.

Volcker saw this as a cancer on America. In normal cancer, the cure (surgery, chemotherapy and radiation) can be worse than the disease. The high interest rates did eventually stop inflation, but at the cost of millions of Americans suffering during a huge recession.

Once inflation was wrung out of the economy, it did lead to an economic boom enjoyed by future presidents such as Bill Clinton and both Bush presidents.

If inflation becomes hyperinflation, history has darker lessons. Hyperinflation destroys the middle class, which is the glue that keeps all countries stable. The hyperinflation of the 1930s led to the collapse of the German economy (a precursor to World War II) and the Communist Revolution in China.

A future article will talk about how one protects one’s financial future if inflation lasts for years.

Free information on tax savings, retirement planning and solar business investments can be found at drharoldwong.com or over at solarbusinessinvestments.com. To schedule your free consultation, contact Dr. Harold Wong at 480-706-0177 or harold_wong@hotmail.com.

Dr. Harold Wong earned his Ph.D. in economics at University of California-Berkeley and has appeared on over 400 TV/radio programs.