'Where Are The Buyers' In Phoenix?

The Arizona Republic reports on the lack of affordability in Phoenix. "Skyrocketing prices have made Valley resale homes harder to afford than any time since the beginning of the last decade. A key housing index shows that a used home in metro Phoenix has not been so difficult to afford since 1990, even though interest rates have remained fairly stable and incomes are up. That's because prices for resale homes are at record high, though the market has cooled in recent months." "The new figures have implications for everyone associated with the Valley's real estate market, from agents to owners to businesses worrying if their employees can find a place to live. 'If you are trying to by a home, you have to be careful about what you are doing,' said Jay Butler, head of the ASU real estate center. 'If you are trying to sell this area as a place for a new company, then you may have some serious issues.'" "But incomes are not growing as quickly as house prices, which are at record levels after a yearlong selling frenzy fueled in part by speculators. The index is based on the value of 100 being the level where a typical buyer can afford a median-priced home at current interest rates and household income. Numbers higher than 100 signify increased affordability and those lower suggest the opposite. The Valley's resale index fell from 114 in 2004 to 84 in 2005. The new-home index dropped from 102 to 80 during that same time." "Buyers may finally be fed up with the higher prices. Agents say there are more houses on the market than at the peak of the buying binge and the houses are taking longer to sell." "'I asked another Realtor what he thinks about the real estate market,' said Brett Barry, (an) agent who specializes in the northeast Valley. 'He said, "What real estate market?' I have sellers calling me every day, breathing down my neck, saying, 'Where are the buyers?'"