Resale home sales increasing, but mainly due to foreclosures!

By
Real Estate Agent with Terra Solis Realty, LLC www.ChandlerRealEstate.weebly.com DRE# SA577557000

Although the number of resale home sales is increasing, it was mainly due to foreclosure sales.  There was a total of 6,490 single family detached home resales in March according to the report written by Jay Butler, associate professor of real estate at the W.P. Carey School of Business at Arizona State University.  Out of the 6,490 sales, 4,370, or 67.3 percent were foreclosures.  I don't know how much higher this can go, but if it weren't for foreclosures, there would have only been 2,120 resales in March, which would be significantly lower than the norm for this time of year, which is the beginning of the seasonal increase of sales through August.  

This goes to show you that the foreclosures are holding back a true recovery.  Obviously if it wasn't for the foreclosures, we would be in a much slower market, which would actually add to a faster recovery, and a faster increase in home values.  Unfortunately, the number of foreclosures is not going to decrease anytime in the near future.  The 4,370 foreclosures for March was a record for the valley, surpassing the old record of 4,200 set in July of 2009.  Another reason for the increase in total home sales for March may be the fact that the homebuyer federal tax rebate is coming to an end April 30th.  The good thing is the median sales price has been steadily increasing over 2009 stats, and is up 9.3 percent over March 2009, when the median sales price was $127,000.

In order for the Phoenix Metropolitan single family resale market to reach a point of stabilization, there must be a huge decrease in the number of foreclosures.  Some things that will impact the foreclosure market are job and income growth, the remaining number of adjustable rate mortgages still expected to reset in the next year or two, and the amount of shadow inventory that has yet to hit the housing market.

 Here's a graph of how some of the cities fared:

CITY MARCH 2010 RESALES % CHANGE FROM 2009 MARCH 2010 MEDIAN % CHANGE FROM 2009 MARCH 2010 FORECLOSURES % CHANGE FROM FEBRUARY 2010
Phoenix 1,660 -10.3% $95,000 32.6% 1,310 19.5%
Chandler 370 37.0% $195,000 -7.7% 245 30.6%
Gilbert 420 25.4% $185,000 -8.1% 260 34.6%
Mesa 655 20.2% $133,000 5.3% 450 32.2%
Tempe 100 53.8% $167,385 -19.5% 55 18.2%
Maricopa County 6,490 9.3% $142,500 10.9% 4,370 24.4%


Folks, we're getting closer, but we're not out of the woods yet.

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Topic:
Real Estate Market Trends
Location:
Arizona Maricopa County
Groups:
Arizona Real Estate
City & State: Listings and Market Reports
Local Expert
Market Updates
Posts to Localism
Tags:
phoenix market resales increase
phoenix foreclosure stats
foreclosures on the upswing

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Rainmaker
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Tom Priester
Paradise Sharks Real Estate
Paradise Sharks Real Estate

Great statistics Troy. We are seeing similar data here in southern Florida.

April 23, 2010 04:09 AM
Rainmaker
213,552
Troy Erickson
Your Chandler, Ahwatukee, and East Valley Realtor
Terra Solis Realty, LLC www.ChandlerRealEstate.weebly.com

Tom - I think it's very unfortunate that most of the real estate business these days is foreclosures.  It really leaves a bad taste in my mouth.

April 23, 2010 03:34 PM
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Rainmaker
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Troy Erickson

Your Chandler, Ahwatukee, and East Valley Realtor
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