More than half of existing home sales in the Phoenix region were foreclosure resales during November 2010, and median home prices in the area were more than 50 percent below the all time peak in 2006. November 2010 also marked the third consecutive month that median prices per square foot in Phoenix dropped; the median price per square foot was nearly 10 percent below last year’s levels for November 2009. See the following article from DQNews for more on this.
Phoenix-area November home sales bucked the seasonal norm and rose slightly from October, but they still fell nearly 17 percent from a year ago and remained well below average. The median sale price dropped below the year-ago level for the fifth consecutive month amid an increase in foreclosure resales and sub-$100,000 transactions, a real estate information service reported.
A total of 7,127 new and resale houses and condos closed escrow during November in the combined Maricopa-Pinal counties metropolitan area. That was up 2.0 percent from the month before but down 16.6 percent from a year earlier, according to MDA DataQuick of San Diego, which tracks real estate trends nationally via public property records.
On average, sales have fallen 7.3 percent between October and November since 1994, when DataQuick’s complete Phoenix region statistics begin. Last month’s 2.0 percent gain from October could reflect, among other things, the increase in housing affordability that has resulted from lower prices and ultra-low mortgage rates in recent months.
Last month’s total transactions were the lowest for a November since 2008 and fell 18.5 percent below average for November sales since 1994.
November’s total resales – existing (not new) houses and condos combined – rose 1.7 percent from October but fell 8.9 percent from a year earlier, to the lowest level for a November since 2008. However, while sales of existing detached houses declined 10.5 percent year-over-year, condo resales rose 3.7 percent from a year earlier.
It was a 55 percent year-over-year drop in new-home sales that tugged the region’s overall November sales down so much from last year. November sales of newly built houses and condos were the lowest for that month since 1997. New-home sales represented just 9.0 percent of total Phoenix-area sales last month, compared with 16.7 percent a year ago and an historical monthly average of nearly 24 percent.
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In November, buyers paid a median $127,500 for all new and resale houses and condos that closed escrow in the Phoenix metro area, down 1.0 percent from October and down 10.7 percent from $142,700 in November 2009. It was the fifth month in a row in which the median fell on a year-over-year basis and the fifth in which the month-to-month change was negative or flat.
The Phoenix area’s November median was nearly 9 percent lower than the peak median this year –$139,900 in June – and it stood 51.7 percent below the all-time peak of $264,100 in June 2006.
Another key price gauge analysts watch, the median price paid per square foot for existing single-family detached houses, dipped to $69 last month, down 1.4 percent from October and down 9.2 percent from a year earlier. It was the third consecutive month in which the median paid per square foot dipped year-over-year, and it was the steepest decline since a 9.5 percent annual drop in November last year. Last month’s median paid per square foot stood 59.6 percent below the $171 peak in August 2006.
Last month 36.5 percent of all homes sold for less than $100,000, compared with 35.6 percent in October and 26.9 percent a year earlier.
Foreclosure resales, defined as homes that had been foreclosed on in the prior 12 months, represented 54.3 percent of the Phoenix-area resale market – the highest level since September last year, when it was 56.5 percent. The November figure was up from 53.9 percent in October and 52.2 percent in October 2009, but was below the peak level for foreclosure resales – 66.2 percent – in March 2009.
Investors, including many paying with cash, and first-time buyers continue to snap up many of the foreclosed properties on the market.
Absentee buyers purchased 41.9 percent of all Phoenix-area homes sold in November, down from 42.7 percent in October but up from 35.3 percent a year earlier. They paid a median $102,000 last month, down from $105,000 in October and $123,500 a year earlier. While absentee buyers are mainly investors, they can include second-home buyers and others who indicate at the time of sale that the property tax bill will go to a different address.
Those who appeared to be buying with cash accounted for 40.4 percent of November home sales, up from 39.7 percent in October and 31.5 percent a year earlier. Last month they paid a median $95,000, up from $88,000 in October but down from $115,000 a year earlier. Specifically, these were transactions where there was no indication of a purchase loan recorded at the time of sale. Some of these “cash” buyers could have used alternative financing arrangements outside of a typical, recorded purchase mortgage, and in some cases they might take out mortgages after their purchases.
All-cash deals have become popular in many Western markets where prices have dropped sharply, luring investor buyers who don’t always qualify for traditional mortgages. Moreover, sellers favor the relative speed and certainty of all-cash transactions.
The flipping of homes has trended higher in recent months. In November, 3.7 percent of the Phoenix-area homes sold had previously been sold within the prior six months, up from a flipping rate of 3.5 percent in October but down at tad from 3.8 percent a year ago.
In October, 37.8 percent of all Phoenix-area home purchase loans were low-down-payment, government-insured FHA mortgages, a popular choice for first-time buyers. That was down from 39.8 percent in October and 47.0 percent a year earlier. Last month’s figures was the lowest since FHA loans accounted for 36.1 percent of all home purchase loans in May 2008.
On the foreclosure front, lenders foreclosed on 3,021 house and condo units in the two-county Phoenix area in November, down 35.2 percent from October and down 29.6 percent from a year earlier. The sharp month-to-month decline was seen across much of the West, and likely stems at least partially from the foreclosure/mortgage paperwork fiasco that erupted over the past few months.
During the first 11 months of this year, 55,499 Phoenix-area housing units were lost to foreclosure, up 6.2 percent from the same period last year. The foreclosure figures are based on the number of Tustees Deeds filed with county recorder offices. The document signals that a home was lost to foreclosure. The foreclosure totals can include units that the county assessor has designated as condos, but are currently used as apartments (e.g. a 100-unit complex designated as condos but used as apartments could be foreclosed on and those units would be reflected in the foreclosure total for that month). For this reason and others, the number of homes foreclosed on has seesawed, and a single month’s increase or decline doesn’t necessarily indicate the beginning of a lasting trend.
This article has been republished from DQNews. You can also view this article at DQNews, a real estate research and news site.