August 20, 2008

Foreclosures continue to rise in Greater Phoenix resale market

Posted: August 20, 2008

In July 2008, there were a total of 8,165 resale homes recorded sold. Foreclosure activity represented 42 percent (3,470 transactions), while there were 4,695 traditional market transactions. Foreclosed transactions represent home owners losing their property to successful individual bidders or the lender of record. In June 2008, the spilt was 3,275 foreclosed homes and 4,565 traditional transactions, while a year ago there were 660 and 4,080, respectively. Historically, July represents the end of the resale home season, with ensuing months posting slowing recorded activity. The 2008 year-to-date total is 25,755 traditional sales and 18,060 foreclosures.

Foreclosure activity differs throughout the Valley such as 41 percent in Surprise, 13 percent in Tempe and 22 percent in Scottsdale. 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 $200,750, while the foreclosed properties had a median price of $159,205. For a year ago, the median prices were $270,000 and $220,075, respectively.

“Investment interest is being driven by the anticipation that home prices will rise again in the next few years,” said Jay Butler, director of Realty Studies at Arizona State University’s Morrison School of Management and Agribusiness at the Polytechnic campus. “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 from $552,500, while the traditional market was $560,000. In South Scottsdale the splits were $205,375 and $247,000, respectively. In Maryvale, traditional transactions were $99,900 and foreclosures were $119,000, while in Union Hills it was $274,250 and $207,070, respectively.

While lower prices can greatly improve affordability, they can adversely impact many owners and potential sellers as their limited equity erodes, and 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.

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, the slowing economy, job losses and higher prices for food and fuel, will further stress households and 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. In a weak economy, many households now will not have the needed income to save their homes, even with a new mortgage payment plan. Thus, the impact of the economic downturn and inflationary pressures will define how much further the housing market will worsen and when will recovery begin.

Within the 870 total recorded sales, the townhouse/condominium market had 280 foreclosed properties. A year ago the split was 1,030 for traditional sales and 55 for foreclosed sales. In July 2008, the median price for foreclosed properties was $125,800 while the traditional market stood at $160,000. For June 2008, the respective splits were $133,215 and $164,950.

The median square footage for a single-family home recorded sold as foreclosed was 1,660, and 1,825 square feet for a market transaction home. In Paradise Valley, the median square footage was 3,360 square feet at a median price of $1,555,000. For a year ago, the foreclosed market was at 1,765 square feet and the traditional market stood at 1,755 square feet. In the townhouse/condominium sector, the median square footage for a foreclosed unit was 1,010 square feet (1,005 square feet for a year ago), while the traditional market unit was 1,160 square feet (1,060 square feet for a year ago).

 

July 2007 -- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 1,260

$221,000

1,085

$229,000

175

$189,875

Scottsdale 355 595,500 325 604,125 30 560,370
Chandler 360 308,000 330 310,000 30 301,750
Gilbert 335 307,500 285 315,000 50 276,130
Mesa 475 242,000 425 246,400 50 207,370
Tempe 160 283,000 150 284,725 10 210,260
Avondale 105 222,750 75 223,000 30 222,525
El Mirage 60 180,000 45 185,000 15 170,540
Glendale 345 234,940 290 239,450 55 209,240
Goodyear 90 243,000 75 260,000 15 209,020
Peoria 225 264,900 190 270,000 35 252,365
Sun City 60 187,500 60 187,500    
Sun City West 50 245,000 50 245,000    
Surprise 225 234,450 155 234,900 70 230,000
County 4,740 $260,000 4,080 $270,000 660 $220,075

 

June 2008 -- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix

2,230

$158,100

1,070

$180,000

1,160

$144,890

Scottsdale 440 501,135 355 525,000 85 360,000
Chandler 495 248,875 360 269,900 135 195,400
Gilbert 500 246,265 345 256,000 155 227,900
Mesa 745 179,065 450 189,900 295 160,625
Tempe 150 240,000 115 245,500 35 201,595
Avondale 285 161,000 130 158,445 155 165,970
El Mirage 145 133,100 60 132,000 85 136,255
Glendale 535 182,955 280 201,000 255 164,500
Goodyear 190 186,280 110 190,000 80 179,475
Peoria 350 218,440 205 222,250 145 217,500
Sun City 110 165,000 95 160,000 15 229,075
Sun City West 60 195,000 60 195,000    
Surprise 505 175,000 285 175,000 220 175,000
County 7,840 $194,761 4,565 $218,000 3,275 $169,890

 

July 2008 -- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix

2,480

$147,475

1,145

$167,000

1,335

$134,670

Scottsdale 385 450,000 300 455,000 85 446,775
Chandler 440 229,500 320 239,750 120 198,405
Gilbert 515 239,620 345 240,000 170 231,000
Mesa 800 171,925 485 179,000 315 160,000
Tempe 115 240,000 100 248,500 15 213,560
Avondale 310 159,000 145 155,000 165 160,000
El Mirage 175 124,900 70 124,900 105 125,000
Glendale 570 170,000 315 182,700 255 155,235
Goodyear 225 182,900 135 189,000 90 180,435
Peoria 355 211,000 215 221,150 140 192,960
Sun City 85 155,000 75 155,500 10 153,940
Sun City West 45 205,000 45 205,000    
Surprise 475 173,620 280 175,000 195 165,750
County 8,165 $181,000 4,695 $200,750 3,470 $159,200

 

July 2007 -- TOWNHOUSE-CONDOMINUM RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix

380

$166,400

355

$166,500

25

$160,255

Scottsdale 245 232,000 225 231,000 20 252,000
Chandler 35 165,000 35 165,000    
Gilbert 15 159,950 15 159,950    
Mesa 115 145,000 110 147,000 5 115,625
Tempe 80 190,000 80 190,000    
Avondale            
El Mirage            
Glendale 55 139,160 55 139,160    
Goodyear            
Peoria 25 176,500 25 176,500    
Sun City 50 134,500 50 134,500    
Sun City West 10 152,950 10 152,950    
Surprise 10 119,350 10 119,350    
County 1,085 $178,770 1,030 $179,700 55 $165,280

 

June 2008 -- TOWNHOUSE-CONDOMINUM RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix

310

$147,000

205

$154,990

105

$135,495

Scottsdale 200 221,950 170 228,900 30 184,020
Chandler 25 143,535 10 195,000 15 134,485
Gilbert 10 185,000 10 190,000    
Mesa 95 125,000 70 130,000 25 101,915
Tempe 40 154,000 30 157,500 10 141,360
Avondale            
El Mirage            
Glendale 40 113,100 20 125,900 20 106,250
Goodyear            
Peoria 15 154,960 10 167,450 5 134,260
Sun City 30 107,500 30 109,000    
Sun City West 15 131,000 15 131,000    
Surprise            
County 855 $151,757 625 $164,950 230 $133,215

 

July 2008 -- TOWNHOUSE-CONDOMINUM RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix

305

$138,600

175

$150,000

130

$120,700

Scottsdale 190 230,000 160 229,000 30 249,475
Chandler 45 142,950 30 155,000 15 125,000
Gilbert 15 158,250 10 164,750 5 128,290
Mesa 105 127,500 70 131,500 35 102,815
Tempe 55 153,000 45 155,000 10 122,240
Avondale            
El Mirage            
Glendale 35 108,550 15 114,900 20 101,000
Goodyear            
Peoria 15 112,500 5 114,070 10 112,500
Sun City 40 109,000 35 109,450 5 86,250
Sun City West 10 124,000 10 124,000    
Surprise            
County 870 $147,200 590 $160,000 280 $125,800

 


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.

Jay Butler, Jay.Butler@asu.edu
(480) 727-1300

Chris Lambrakis, lambrakis@asu.edu
(480) 727-1173
Public Affairs at ASU Polytechnic campus