The West Valley Expert

Market Trends - The Repeat Sales Index

In order to better understand market trends, I am providing a summarization of the Arizona State University's W.P. Carey School of Business Repeat Sales Index (ASU-RSI). The use of repeat sales is a proven method and is the most reliabile way to estimate price changes in the residential market. The ASU-RSI measures the price change of the same home over time. This method is more accurate than the traditional Comparable Sales or "comps" method because it removes the differences in home characteristics and location. A more detailed explanation of the RSI can be found here.

The index uses January 1989 as 100%; that is the current index is expresses as a percentage relative to January 1989. As resale prices climb, the index rises. Simialrly as repeat sales prices fall, the index gets smaller. The index has a lag of three months in its data.

As can be seen in the picture below, the market peaked between 2006 and 2007. Most areas within the valley have lost substantial value and are, only now, beginning to stabilize. Some areas, such as Central (Phoenix), have lost value back to levels seen prior to the year 2000. Other areas, such as the Northeast (Carefree, Cave Creek, Fountain Hills, Paradise Valley, and Scottsdale), fared slightly better, retreating to prices from mid-2004.

Many industry analysts believe that the market will remain flat for the next few years, as short sales and sale of foreclosed properties will dominate the metropolitan Phoenix market for the next few years. If you are in the market for a home, there is no better time than now.

Cities Included In Each Region

Northeast: Carefree, Cave Creek, Fountain Hills, Paradise Valley, and Scottsdale
Northwest: El Mirage, Glendale, Peoria, Sun City, Sun City West, Surprise, and Youngtown
Central: Phoenix
Southeast: Apache Junction, Chandler, Gilbert, Higley, Mesa, Queen Creek, Sun Lakes, and Tempe
Southwest: Avondale, Buckeye, Goodyear, and Litchfield Park

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