Phoenix is one of the bubble recovery bellwether metros for housing, and it looks like it’s regained its footing.

The final numbers are out for 2014, and the median single-family-home price in the Phoenix area officially went up 5.4%.

That’s according to the latest monthly report from the W. P. Carey School of Business at Arizona State University.

After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just another 5.4% -- $204,000 to $215,000 -- from December 2013 to December 2014.

Realtors will note the average price per square foot went up about 3%. At the same time, townhomes and condos really took off, with their median sales price up about 15% – from $123,900 to $142,000.

“The most promising signs in 2014 were for townhomes and condominiums, where both sales volumes and prices were higher than expected,” says the report’s author, Mike Orr, director or the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Demand is shifting away from single-family homes and toward smaller attached homes that are easier to maintain and to ‘lock and leave.’ Growing numbers of baby boomers, whose children have grown up and left, are downsizing. Many millennials also seem to show a preference for smaller, easy-to-maintain homes in central locations.”

Orr adds that mid-range and luxury homes continue to do relatively well in the Phoenix market, while it’s tougher to find homes priced below $150,000. The amount of single-family home sales overall was up 3% from December 2013 to December 2014.

As of December 2014:

  • The median single-family-home sales price rose 5.4% in 2014 – from $204,000 to $215,000.
  • Demand for townhomes and condos is strengthening, and the median sales price for those types of homes went up a whopping 15% in 2014.
  • Demand for rental homes also remains strong.

Meantime, the supply level remains low. The number of active listings available on Jan. 1, 2015 was down 3% from the already low level of Jan. 1, 2014.

“We anticipate a modest increase in sales in 2015, as compared with 2014,” says Orr. “The primary increase in demand is likely to come from boomerang buyers who have repaired their credit after foreclosure or short sale several years ago.”