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Report: Phoenix home prices to keep falling

Phoenix Business Journal – by Mike Sunnucks

Date: Thursday, January 6, 2011, 2:10pm MST

Housing remains a dark cloud over Arizona’s hope for an economic rebound.

Phoenix-area home prices are expected to drop 9.4 percent in 2011, according new projections from Clear Capital. The research information provider said Valley home prices were down 8 percent in 2010.

Tucson is projected to see an 11.9 percent drop this year after a 12.3 percent drop in 2010.

The real estate group says unemployment and a high number of distressed, foreclosed and bank-owned homes in markets such as Phoenix and Tucson puts downward pressure on housing demand and prices.

Phoenix ranks 45th and Tucson 48th among the 50 largest U.S. metro areas for home price projections for 2011, according to California-based Clear Capital.

Nationally, the company expects U.S. home prices to decline 3.7 percent after a 4.1 percent drop in 2010.

Projections show metro Washington with the best housing price growth in 2011 (6.5 percent gain) and Virginia Beach, Va., with the worst (12.8 percent loss).

Dayton, Ohio, had the worst price drop in 2010 (22.3 percent). Honolulu did the best, with a 7.2 percent gain.