June 19, 2008

Greater Phoenix resale numbers gain from new investors, first-time buyers

Posted: June 19, 2008

In May 2008, a total of 5,740 resale homes recorded sold. This sales activity includes 1,475 recorded foreclosed home transactions and 4,265 traditional market transactions, while a year ago it was 305 and 4,915 recorded sales, respectively. Foreclosed transactions represent home owners losing their property to successful individual bidders or the lender of record. In April 2008, the spilt was 1,825 foreclosed homes and 3,760 traditional transactions.

Historically, May is a strong month and the 4,265 recorded sales represent the best month of 2008 and the best since 4,570 homes were recorded sold in June 2007. The 2008 year-to-date total is 16,280 traditional sales and 6,435 foreclosures.

For the last year, the housing market has been confronting issues derived from the hyper-market of previous years such as the subprime meltdown and overly ambitious investors. Unfortunately, there is increasing data, such as job losses and layoffs that the economy is now weakening and will add further stress for the housing markets.

While there has been little attempt to help investors, there have been many programs started to help people save their homeownership. Most of the attempts have dealt with reset of higher interest rates, with the basic premise being that the home occupant has the income but not enough to satisfy the new mortgage payment.

“However, in a weak economy, many households now will not have the needed income to save their homes, even with a new mortgage payment plan,” said Jay Butler, director of Realty Studies in the Morrison School of Management and Agribusiness at Arizona State University’s Polytechnic campus. “With increased energy and food costs, there is even additional strain on the household budget, thus, the potential economic downturn and inflationary pressures will define how much further the housing market will worsen and when recovery will begin.”

The declining prices have fueled renewed investor interest and potential owner-occupants, especially in the lower income ranges. For the traditional market, the median price was $223,500, while the foreclosed properties had a median price of $179,465. For a year ago, the median prices were $265,000 and $217,225, respectively.

“Investment interest is being driven by the anticipation that home prices will rise again in the next few years,” said Butler. “The lower median price is being impacted by several forces, including the large number of vacant homes, especially in certain neighborhoods. Further, capital is available for lower-priced housing, but lacking in the higher priced housing market.”

Since the Greater Phoenix area is so large, the median price can range significantly. In North Scottsdale, the median price for a foreclosed property was $475,000, while the traditional market was $575,000. In South Scottsdale the splits were $253,515 and $260,000, respectively. In Maryvale, traditional transactions were $147,900 and foreclosures were $142,785, while in Union Hills it was $280,000 and $231,415, respectively.

Lower prices can greatly improve affordability, but they can adversely impact many owners and potential sellers who are watching their limited equity erode, as prices decline to and even below existing debt level. Thus, lower prices affect the ability and desire to continue owning the home and even overall confidence in the economy, which puts additional strain on the local housing market.

Within the 810 total recorded sales, the townhouse–condominium market had 130 foreclosed properties. A year ago the split was 1,225 for traditional sales and 20 for foreclosed sales. In May 2008, the median price for foreclosed properties was $136,000, while the traditional market stood at $169,900. For April 2008, the respective splits were $148,000 and $171,500.

The median square footage for a single-family home recorded sold as foreclosed was 1,695 and 1,840 square feet for a traditional market transaction home. In Paradise Valley, the median square foot home was 3,210 at a median price of $2,000,000. For a year ago, the foreclosed market was at 1,735 square feet and the traditional market stood at 1,695 square feet. In the townhouse/condominium sector, the median square footage for a foreclosed unit was 1,025 square feet (1,155 square feet for year ago), while the traditional market was 1,195 square feet (1,090 square feet for a year ago).

May 2007 -- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 1,405 $229,000 1,320 $230,000 85 $197,475
Scottsdale 420 617,000 410 620,000 10 541,335
Chandler 360 297,750 345 297,500 15 314,595
Gilbert 300 300,000 290 305,000 10 256,500
Mesa 610 238,000 585 240,000 25 199,830
Tempe 155 270,780 155 272,500    
Avondale 120 223,000 95 225,000 25 215,280
El Mirage 55 200,000 45 200,000 10 190,460
Glendale 355 243,000 335 245,000 20 204,605
Goodyear 90 250,000 80 250,000 10 181,950
Peoria 245 255,000 220 250,000 25 311,710
Sun City 120 199,000 120 199,000    
Sun City West 70 258,725 70 258,725    
Surprise 240 245,070 215 245,070 25 245,790
County 5,220 $262,000 4,915 $265,000 305 $217,225

 

May 2008 -- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 1,420 $180,000 940 $195,750 480 $152,605
Scottsdale 415 470,000 360 475,000 55 414,600
Chandler 365 250,000 315 255,000 50 202,465
Gilbert 375 240,000 300 241,000 75 235,550
Mesa 575 197,000 450 202,500 125 169,505
Tempe 145 258,000 130 262,000 10 186,840
Avondale 170 164,530 120 163,320 50 165,800
El Mirage 90 132,000 55 135,000 35 127,350
Glendale 375 190,000 270 200,000 105 170,000
Goodyear 160 200,000 115 212,000 45 186,450
Peoria 300 229,250 215 236,000 85 207,825
Sun City 110 175,000 105 175,000 5 231,410
Sun City West 60 190,850 60 189,000    
Surprise 350 185,240 245 191,450 105 177,210
County 5,740 $211,305 4,265 $223,500 1,475 $179,465

 

May 2007 -- TOWNHOUSE-CONDOMINUM RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 380 $165,745 370 $165,990 10 $99,000
Scottsdale 295 273,250 285 275,000 10 251,170
Chandler 40 175,000 40 175,000    
Gilbert 15 215,000 15 215,000    
Mesa 160 150,000 155 151,000 5 121,050
Tempe 90 189,400 90 189,400    
Avondale            
El Mirage            
Glendale 50 147,000 50 147,000    
Goodyear            
Peoria 35 169,500 35 169,500    
Sun City 55 130,250 55 130,250    
Sun City West 25 152,500 25 152,500    
Surprise 15 110,000 15 110,000    
County 1,245 $184,990 1,220 $185,000 25 $132,785

 

May 2008 -- TOWNHOUSE-CONDOMINUM RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 240 158,000 190 162,000

50

139,550
Scottsdale 200 240,000 175 247,500 25 178,545
Chandler 30 142,650 20 144,750 10 138,775
Gilbert 15 180,500 10 180,000 5 200,425
Mesa 100 139,000 80 147,000 20 116,000
Tempe 50 160,775 50 165,000    
Avondale            
El Mirage            
Glendale 25 111,945 10 113,500 15 86,730
Goodyear            
Peoria 15 110,000 15 131,000    
Sun City 55 114,500 50 115,000    
Sun City West 20 137,500 20 137,500    
Surprise            
County 810 $165,000 680 $169,900 130 $136,000

 


Realty Studies is associated with the Morrison School of Management and Agribusiness at Arizona State University’s Polytechnic campus. Realty Studies collects and analyzes data concerning real estate in the greater Phoenix metropolitan area. Realty Studies is a comprehensive and objective source of real estate information for private, public and governmental agencies. Its director, Dr. Jay Q. Butler, may be reached at (480) 727-1300 or e-mail him at Jay.Butler@asu.edu. To subscribe to RSS feed for Realty Studies news, visit http://www.poly.asu.edu/realty/rss.html.

Chris Lambrakis, lambrakis@asu.edu

(480) 727-1173
Public Affairs at ASU Polytechnic campus