Tucson home price declines not as significant as some

The latest report by the Office of Federal Housing Enterprise Oversight (OFHEO) shows Arizona home prices are dropping fast. Arizona saw a 1.21% decrease in home prices in the fourth quarter of 2007, and home values dropped an average of 2.4% for the entire year.

While Phoenix was hit hard, Tucson saw better numbers. The Phoenix metro area suffered priced declines of 1.8% for the fourth quarter and 3.42% for the year. Tucson home values saw a small increase of .31% for Q42007, and a minimal decrease of only .01% for the year. When you compare these numbers to each of the cities appreciation over the last five years, the decreases are really insignificant. Phoenix saw 82.76% appreciation and Tucson saw 71.65% appreciation since 2002. The national average for appreciation over the last five years was only 41%, so Arizona as a whole is way ahead of the game.

Although this report shows that the real estate market as a whole is suffering, Tucson fairs on the better end. Tucson is a destination city that draws in large numbers of new residents each year. Local homeowners that purchased before 2003 and plan to hold on to their homes for awhile should still see a large amount of appreciation (as long as they didn't max out that equity!) For those that bought during the real estate boom of 2003-2006 and had planned on selling in the next year or so, think again if you want a profit. 2008 is going to be a tough year for real estate, in Arizona as well as the rest of the nation. If you don't have to sell in the next year or so, DON'T! If you're patient and can ride out the wave you and your pocketbook will be much happier!

See the full OFHEO report regarding widespread house declines in Q42007