Valley home sales and prices decline in 1989. (Valley of the Sun, Arizona)

Valley home sales and prices decline in 1989

Fewer homes were sold in 1989 than in any year since the 1982 recession, but total sales were still 29 percent higher than during the recession. Only new single-family prices increased; resale single-family prices remained at 1988 levels, and prices fell on all types of townhouses and condominiums. These conditions created a good market for buyers, but a potentially difficult market for sellers, resulting in low appreciation rates and a longer-than-average time needed to sell the typical home.

The same factors contributed to the weak local real estate market as in 1988: prior overbuilding, high vacancy rates, low job growth and low net in-migration. Tight financial capital added to the problem in 1989. These conditions are beginning to improve, but progress will be slow…