June 10, 2009

Foreclosure activity slows in May for greater Phoenix resale market

Posted: June 10, 2009

There were 9,980 resale homes recorded sold in May 2009, up slightly from the 9,100 recorded sales in April and 7,210 sales for a year ago. Foreclosure activity in May 2009 represented 30 percent (3,035 transactions), while there were 6,950 traditional market transactions.

Foreclosure activity, as a share of total activity, is down significantly from the 51 percent (4,295 recordings) of February 2009. Since recorded sales represent decisions made in prior months, this slowdown can primarily be attributed to the various hiatus programs that lenders instituted, while awaiting the new loan modification and re-financing programs from the federal government, according to Jay Q. Butler, director of Realty Studies in the Morrison School of Management and Agribusiness at Arizona State University’s Polytechnic campus.

For May 2008, there were 2,895 sales in foreclosure or 40 percent on the month’s recordings. For May 2009, foreclosure activity differed throughout the Valley such as 33 percent in El Mirage, 34 percent in Mesa and 33 percent in Glendale.

“Historically, May is one of the strongest months in the resale home season that usually lasts until August,” said Butler. “During the resale season, sales and median prices tend to increase, so some improvement in the local housing market would not be unexpected.”

Although mortgage interest rates and prices are attractively low, tighter underwriting standards, a weak economy and poor job market, including job losses and lost income through reduced pay and furlough programs, could place sever obstacles on the potential of the market.

“There is increasing hope that the housing troubles are beginning to ebb, and the bottom, along with a potential recovery, are  in sight,” said Butler. “However, many problems continue to exist that could hinder the timing of any recovery. The impact of foreclosures on the market has been the primary concern of the last year and will continue to be in the coming months, especially with the end of many hiatus programs and the weak job market.  The fundamental mitigating factor could be the various existing and potential loan modification programs that will allow households to save their homes.”

For the traditional market, the median price in May was $130,000 or down 42 percent from the $224,000 of a year ago. Foreclosed properties had a median price of $150,090 ($174,930 for May 2008).

The declining prices have piqued interest for potential investors and owner-occupants, especially in the lower income ranges. Investment interest is being driven by the anticipation that home prices will rise again in the next few years.

While lower prices can greatly improve affordability, 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. Rapidly declining value can be another issue in some of the mortgage modification programs, which require a limited decline in value from the purchase and financing of the home.

The two fundamental reasons why the median price for foreclosed homes is higher than traditional transactions is that more expensive homes continued to be foreclosed, with 20 being over $1 million in May, including seven over $2 million, and 5 percent of the foreclosures were in the $400,000 to $1 million range. Since most loan modification programs are designed for homes under $400,000, the increase in foreclosure activity for the upper-end market was expected.

The other reason is that, for the last year, approximately 50 percent of the traditional sales were foreclosed homes that were sold again with a median price markdown of 24 percent. The markdown varied throughout the Valley, ranging from 52 percent in Maryvale to 32 percent in Avondale to 17 percent in Tempe.

Since the greater Phoenix area is so large, the median price can range significantly. For May 2009 in North Scottsdale, the median price for a foreclosed property was $451,530 ($410,420 in April), while the traditional market was $435,000 ($450,000 in April). In South Scottsdale the splits were $249,105 ($180,980 in April) and $203,000 ($211,000 in April), respectively.

In Maryvale, traditional transactions were $42,000 ($43,000 in April) and foreclosures were $99,300 ($81,735 in April), while in Union Hills it was $205,450 ($207,500 in April) and $191,720 ($182,750 in April), respectively. 

For May 2009, Paradise Valley had a median square footage of 3,925 and a median price of $1,300,000. 

Of the 1,085 total recorded sales for May 2009 in the townhouse/condominium market 340 were foreclosed properties.  For a year ago, there were 900 total transactions with 220 being foreclosures.

In May 2009, the median price for foreclosed townhouse/condominium properties was $124,380 while the traditional market stood at $110,000. Last year, the splits were $135,600 and $161,000, respectively.

The median square footage for a single-family home recorded sold as foreclosed in May was 1,710 square feet (1,680 for a year ago), while it was 1,735 square feet (1,850 for a year ago) for a market transaction home. In the townhouse/condominium sector, the median square footage for a foreclosed unit was 1,075 square feet (1,035 for a year ago), while the traditional market unit was 1,155 square feet (1,170 for a year ago).

 

May 2008-- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 1,930 $169,090 940 $196,000 990 $150,380
Scottsdale 455 470,000 365 484,500 90 399,715
Chandler 425 245,000 315 255,000 110 211,525
Gilbert 455 236,000 305 242,500 150 225,000
Mesa 725 189,950 455 203,250 270 171,540
Tempe 150 257,000 130 262,000 20 196,640
Avondale 240 164,840 120 163,320 120 166,150
El Mirage 130 130,500 55 135,000 75 126,075
Glendale 490 182,790 270 196,000 220 170,000
Goodyear 205 196,000 115 215,000 90 180,200
Peoria 345 225,000 220 235,000 125 204,745
Sun City 95 161,500 85 160,000 10 203,130
Sun City West 85 210,000 80 200,000 5 220,000
Surprise 440 186,145 250 193,875 190 181,240
             
County 7,210 $201,000 4,315 $224,000 2,895 $174,930

 

 

April 2009 -- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 2,950 $ 80,000 2,100 $ 67,000 850 $122,320
Scottsdale 405 400,000 330 405,000 75 330,500
Chandler 390 190,000 290 195,000 100 173,735
Gilbert 475 197,590 360 196,000 115 202,270
Mesa 835 135,000 630 137,500 205 134,430
Tempe 95 169,000 65 168,000 30 208,785
Avondale 345 108,000 255 105,100 90 111,800
El Mirage 205 66,000 145 65,000 60 85,325
Glendale 645 108,700 455 95,000 190 134,100
Goodyear 255 145,000 170 141,750 85 161,500
Peoria 370 168,000 255 165,900 115 175,520
Sun City 110 135,000 100 130,500 10 168,900
Sun City West 85 176,600 85 176,600    
Surprise 525 132,000 390 130,000 135 139,735
             
County 9,100 $131,715 6,640 $125,000 2,460 $145,965

 

 

May 2009 -- SINGLE-FAMILY RESALE HOMES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix
3,120 $ 80,875 2,135 $ 69,000 985 $115,720
Scottsdale
450 383,940 350 375,000 100 416,680
Chandler
455 197,500 340 198,450 115 192,316
Gilbert
555 190,000 390 185,000 165 199,485
Mesa
905 137,500 600 135,000 305 146,700
Tempe
145 169,000 110 178,000 35 161,500
Avondale
410 108,025 285 103,900 125 117,000
El Mirage
180 68,900 120 68,000 60 76,326
Glendale
735 105,000 490 97,500 245 131,275
Goodyear
300 134,900 205 129,150 95 172,200
Peoria
430 160,000 300 157,750 130 165,075
Sun City
105 141,750 85 140,750 20 158,080
Sun City West
75 180,000 70 181,250 5 157,375
Surprise
580 135,000 405 135,000 175 135,000
             
County 9,980 $135,000 6,945 $130,000 3,035 $150,090

 

 

May 2008 -- TOWNHOUSE-CONDOMINUM RESALES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 305 $154,665 215 $165,000 90 $135,500
Scottsdale 215 235,000 175 247,500 40 173,680
Chandler 30 145,800 20 144,750 10 145,800
Gilbert 20 180,000 10 180,000 10 182,665
Mesa 85 137,500 65 142,000 20 108,660
Tempe 50 158,275 45 163,275 5 130,500
Avondale            
El Mirage            
Glendale 35 111,200 10 113,500 25 107,995
Goodyear            
Peoria 20 109,500 15 124,500 5 93,500
Sun City 50 115,000 50 115,000    
Sun City West 20 137,500 20 137,500    
Surprise            
             
County 900 $161,000 680 $169,900 220 $135,600

 

 

April 2009 -- TOWNHOUSE-CONDOMINUM RESALES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix 350 $103,000 210 $ 98,000 140 $111,785
Scottsdale 230 171,230 180 175,000 50 162,800
Chandler 30 119,000 20 137,000 10 84,710
Gilbert 20 101,000 15 101,000 5 88,875
Mesa 85 100,000 65 103,500 20 84,700
Tempe 25 119,000 20 111,500 5 126,100
Avondale            
El Mirage            
Glendale 35 58,000 20 33,450 15 81,860
Goodyear            
Peoria 15 127,025 15 127,025    
Sun City 50 94,850 50 94,850    
Sun City West 20 107,500 20 107,500    
Surprise 10 101,500 5 110,000 5 61,720
             
County 955 $115,000 685 $116,500 270 $112,250

 

 

May 2009 -- TOWNHOUSE-CONDOMINUM RESALES
Selected Cities Total Median Price Traditional Sales Median Price Foreclosed Sales Median Price
Phoenix
415 $ 96,000 250 $ 80,000 165 $114,230
Scottsdale
225 175,000 170 180,000 55 171,055
Chandler
40 106,815 30 118,250 10 99,000
Gilbert
15 114,500 10 110,000 5 145,000
Mesa
90 107,000 55 98,500 35 117,500
Tempe
45 141,500 35 130,000 10 202,500
Avondale
           
El Mirage
           
Glendale
55 49,000 30 35,000 25 109,900
Goodyear
           
Peoria
20 84,500 15 104,750 5 82,000
Sun City
60 85,500 55 87,000 5 71,400
Sun City West
5 87,000 5 87,000    
Surprise
10 105,000 10 105,000    
             
County 1,085 $114,900 745 $110,000 340 $124,380

 

 


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