The Arizona Republic has an illuminating breakdown of real estate values by zip code in the greater Phoenix metropolitan area. Their website doesn’t have the pages so I can’t send you there directly. I did find another link which I’ll give to you at the end of this post.

The data they have collected and collated is particularly useful as they show not only the direction of home prices on a micro-basis but also provide that information for prior years. The data they published goes back to 2003.

The story the numbers tell for the past year or in some areas two years is dismal. If you look back a bit further it’s a completely different tale. Let me give you a couple of examples.

The zip code in which I live, 85018, experienced a 22.8% decline in value in 2008. If you bought a house in the zip code in 2003, however, your gain over that five year period would have been 47.4%. That’s right even with the disaster that 2008 was a homeowner in the 85018 zip code saw the value of his property increase by 8% a year.

Take a look at El Mirage — a city in the eye of the hurricane. It has one zip code, 85335. Despite a disastrous decline in value of 37.5% in 2008 and 10.3% in 2007 a buyer in 2003 would have seen a 12% increase in value.

These figures are both new and existing homes. If new home sales are excluded then the percentage gain over the five year period is larger, suggesting that buyers were probably over paying for new homes at some point. Though the returns over the five year period vary greatly, there were only two zip codes in which a negative return occurred. One is in a semi-industrial, high crime area and the other in a very remote semi-rural area of the county.

Any comments on these numbers is most welcome. Here are a few quick thoughts of mine:

• Does this mean that prices have a lot more room to fall?
• Has the demise of real estate as an investment been overstated?
• Given this sort of appreciation is the consumer as broke as advertised?
• Is there something wrong with these numbers? What am I missing?

Let’s assume the numbers tell a reliable story. The current argument is that above all else, the decline in the prices of single family homes has to be stopped for the economy to recover. Incredible sums of money are being spent on that premise. The numbers seem to tell us that yes there has been a decline in prices but overall it appears to be more of a pull-back rather than a complete collapse of the market.

If that’s the case, then are we, via artificially low mortgage rates, simply subsidizing a large group of people who have experienced very good investment returns. Perhaps a more targeted approach towards those who are truly in danger of losing their property as opposed to the broad brush approach currently being employed is the best prescription.

As you can see, I’m wandering around here. Give me some ideas.

more: here (This link will take you to an interactive map that lets you pull up the information I discussed for each Phoenix zip code. Unfortunately, it doesn’t compile the data for all zip codes.)