by Lesley Wright — Apr. 2, 2011 08:58 AM

The Arizona Republic

Foreclosures continue to bring down home values in most Southwest Valley cities, although some areas are starting to see an upswing.

Goodyear and Tolleson saw median home values increase in 2010 and most other cities saw declines in the single digits, a relief after the drastic drop in values over the past five years.

Half of the ZIP codes in the Southwest Valley saw some increase in values, according to an Arizona Republic analysis of data from the Information Market.

Last year was a hard year — there was that kind of value despair, said Angela Fairlie, an Avondale real-estate agent. I think we’re on the upswing, but it’s going to be kind of a roller coaster. It will be up and down, up and down until the country feels a little more settled.

Upper-end homes take a hit

Higher-end homeowners, who tended to stay put during the height of the housing crisis, are beginning to feel more heat as values continue to decline.

Short sales and foreclosures are hitting the upper-end properties, said Coldwell Banker broker Greg Marthaler, who sells homes in the Southwest Valley and Surprise. Instead of folks doing strategic defaults and walking away, many are trying to do the right thing. I don’t think anybody is exempt from foreclosure.

Litchfield Park, for example, saw 2010 median home values slide by 14.2 percent compared with 2009, while cities with less-expensive homes saw drops largely in the single digits.

Analysts are seeing more of a rebound in lower-priced communities that were hit hard early in the housing bust.

Marthaler said he does not expect the market to hit bottom until about 2015, which gives higher-end homeowners more incentive to short-sale their homes now. He does not expect homes to see 2005 values again until at least 2023.

Construction gives some hope

He remains optimistic, though, because the number of bank-owned properties on the market has dropped and the Southwest Valley continues to see some building.

I would be optimistic only because there’s new commercial, there’s new retail on the horizon, he said.

Those builders are being more circumspect than in past years and marketing energy efficiency.

CantaMia at Estrella, a gated retirement community in Goodyear, opened in 2010 and focused marketing on the green aspect of their homes. The homebuilders followed Environments for Living Certified Green standards and feature solar and thermal-energy systems to reduce utility bills.

Marley Park, a large development in Surprise, also is able to continue selling new homes with this marketing approach.

The real value proposition is about the cost savings, said Tracy Simmons, Marley Park’s marketing director. Even though you can get a resale home at a great price, the utility bills won’t be up to the standards of today.

Lot more improvement needed

Goodyear, which saw home values increase by 4.8 percent, and Tolleson, up by 2 percent, gave Maricopa County the first increase in values since 2007.

But taking together all the cities and communities in the county, about 34 percent of all resales were foreclosures in 2010, a statistic that continues to drag values down.

Analyst Mike Orr, who publishes the housing-market update Cromford Report, said the market overall is looking better than even a few months ago.

Areas that were beaten up during the worst of the crisis are seeing some upswing.

They’re still improving, but have got a lot more improving to do to get back to normal, Orr said.

All parts of the Valley are seeing a huge influx of investors, who tend to buy the lower-priced homes for rental purposes.

Homes are very affordable. Loans are hard to get, Orr said. People who have got plenty of cash, not only do they get 10 percent (rental income), they are thinking about five years from now. People who have never been in real estate before are moving into the market.

Differences are street by street

Realtors are noticing big differences in home values from subdivision to subdivision, neighborhood to neighborhood and street to street, making generalization difficult.

Fairlie said the disparity is pronounced in the older areas north of Interstate 10 which avoided the worst excesses of the housing bubble, and those south of I-10, where the boom drew people with sketchy loans.

Streets and neighborhoods with fewer foreclosures retain more of their values, another effect of appraisers, which agents across the board accuse of lowballing houses.

Fairlie counsels sellers to talk to a financial adviser as soon as the mortgage looks unmanageable since homes, especially on the higher end, continue to lose value.

If it makes sense, do short-sale. Don’t wait, she said. Talk to your bank. It’s hard, it’s frustrating. They are not called short-sales for nothing. They should be called stressful sales.

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