Report shows Phoenix home foreclosures declining
Foreclosures as a share of the overall Phoenix-area resale-housing market activity are declining. The latest Realty Studies report from the W. P. Carey School of Business at Arizona State University explains the number of foreclosures has gone down from 40 percent of the market’s recorded activity in March to 33 percent in May. However, will the drops continue?
“The key question is whether this is a harbinger of the future of steadily lower foreclosure activity or a ‘blip’ with a return to higher levels,” said associate professor of real estate Jay Butler, who authored the new report. “Defaults and late payments are still at record levels and could be a precursor of additional foreclosures. The main issues center on whether income will increase enough for people to hold onto their current homes and whether they can maintain payments on their houses, especially if confronted with a change in an adjustable-rate mortgage that could reset in coming months.”
Butler said some may choose to walk away from their homes in the face of declining neighborhood values and high debt amounts, especially after the school year ends. As a total, foreclosures added together with the sales of previously foreclosed-on properties still represented 60 percent of the recorded activity in the Phoenix-area housing market in May.
“For the last year, approximately 42 percent of the traditional sales were foreclosed homes sold again with a median markdown of 15 percent from the foreclosed price,” Butler said.
More than 3,200 single-family homes in the Phoenix area were foreclosed on during May of this year. That’s down from almost 3,500 foreclosures in April, but up from just over 3,000 in May of last year.
The market is less busy, but higher priced this spring than last spring. The number of homes resold was more than 6,400 in May of this year. That’s down from almost 6,800 in April and almost 7,000 last May. The median single-family home price was $144,000 in both April and May, significantly up from $130,000 last May.
The townhouse/condominium market continues to suffer with 470 foreclosures this May, way up from 340 last May. The median price of a Phoenix-area townhome/condo was $99,775 this May, way down from $110,000 last May.
Butler’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/realestate/Phoenix-Resale-Market-Reports.cfm. More analysis is also available from Knowledge@W. P. Carey, the business school’s online resource and biweekly newsletter, at http://knowledge.wpcarey.asu.edu.