Phoenix Area September Home Sales Data

REALTY STUDIES
September 2010
RESALE HOME MARKET
Foreclosure activity continued to dominate the resale housing market. With 4,110 recordings, foreclosures accounted for 46 percent of the 9,005 total home recordings for September 2010. This is the highest level of foreclosure activity since 4,370 were recorded in March 2010. The uptick in the resale home activity is not unusual as the traditional selling season comes to an end. For September 2010, there were 9,005 recorded sales, which is a decline from the peak 10,860 sales of March, but slightly above last year’s 9,070 sales.
Foreclosure activity, as percentage of the total resale market, varied throughout the Valley such as 60 percent in El Mirage, 36 percent in Scottsdale and 43 percent in Tempe. Another significant component of the market was the sale of previously foreclosed property, which accounted for approximately 40 percent of the traditional transactions (4,110 sales). Thus, foreclosure–related activity represented 67 percent of the recorded activity.
The biggest issue is heightening uncertainty in the housing market, throughout the country, brought about by the evolving problems within the foreclosure process. The potential impact could encompass moratoriums, availability of title insurance, willingness of people to purchase foreclosed properties and the public perception and acceptance of the entire home financing process. As the year comes to an end, it is not unusual for median home prices to decline from the levels found in resale home buying season. The fundamental reason is sales activity declines in response to holiday and school activities that allow little time or desire to buy a home. In confronting potential uncertainty, the level of activity and prices could even be lower than generally expected as people await the review and resolution of the problems associated with the foreclosure process.
Beyond the impact of foreclosure activity, the absence of a strong move-up market, which is fundamental to a housing recovery, will also limit any growth in home prices. While lower prices can greatly improve affordability, they can adversely impact many owners and potential sellers whom are watching their limited equity erode, as prices decline to and even below existing debt level. The median price for the traditional market in September was $135,000, which is the same as August 2010, but down from last year’s $140,000. The foreclosed properties had a median price of $142,000 in contrast to $147,050 for August and $136,800 for a year ago.
Housing prices are being influenced by foreclosure-related activity. The first influence is that expensive homes continued to be foreclosed, with 18 being over $1 million in September, including 5 above $2 million. Another influence is that, for the last year, approximately 40 percent of the traditional sales were foreclosed homes that were sold again with a median price markdown of 14 percent from the foreclosed price. Although the markdown has improved from 25 percent a year ago, it does vary throughout the Valley ranging from 45 percent in Maryvale to 15 percent in Peoria to 8 percent in the Gilbert area.
Since the Greater Phoenix area is so large, the median price can range significantly. For September 2010 in North
Scottsdale, the median price for a foreclosed property was $353,035 ($323,495 in August) while the traditional market was
$430,000 ($420,000 in August). In South Scottsdale the splits were $175,075 ($184,120 in August) and $159,900 ($164,475
in August), respectively.
In Maryvale, traditional transactions were $47,000 ($49,000 in August) and foreclosures were $73,240 ($78,500 in
August), while in Union Hills it was $192,000 ($192,500 in August) and $165,800 ($174,895 in August), respectively. For
September 2010, Paradise Valley had a median square footage of 5,625 and a median price of $1,465,000.
Within the 1,360 total recorded sales for September 2010, the townhouse/condominium market had 555
foreclosed properties. For a year ago, there were 1,175 total transactions with 410 being foreclosures. In September
2010, the median price for foreclosed properties was $106,860 while the traditional market stood at $75,000. Last year,
the splits were $105,150 and $100,000, respectively.
The median square footage for a single-family home recorded as foreclosed in September 2010 was 1,690 square
feet (1,690 for a year ago), while it was 1,830 square feet (1,795 for a year ago) for a market transaction home. In the
townhouse/condominium sector, the median square footage for a foreclosed unit was 1,100 square feet (1,015 for a year
ago), while the traditional market units was 1,075 square feet (1,120 for a year ago).