Home sales in the Phoenix market dropped to their lowest level during the month of August in 14 years, with median home prices declining both year-over-year and from the previous month. While both new and existing home sales dropped, sales of sub-$100,000 homes increased by nearly one-third from the same period last year. See the following article from HousingWire for more on this.
The 7,113 Phoenix home sales made in August was 29.5% below the average monthly total of more than 10,000 in the area, according to the San-Diego based real estate data provider DataQuick.
It is also the lowest August number in 14 years. Sales figures fell 17% from last year in August and 6.5% from July.
Both new and existing sales slowed. Existing home sales dropped 16% from last year, and 7.1% from July. Sales of newly built homes and condos held flat from July but remained 26.3% below last year’s level.
Prices are beginning to follow demand. The median home price in Phoenix reached $130,000 in August, down 3.7% from last year and 1.5% in July. August prices are currently 50.8% below the $264,100 peak in July 2006.
“Contributing to last month’s year-over-year decline in the overall median sale price was the drop in sales of new homes, which typically sell for more than resale homes,” according to DataQuick. “A decline in new-home sales puts downward pressure on the median, the point where half of the homes sold for more and half for less.”
In August, a significant amount of sales, 34.7%, occurred in the sub-$100,000. That’s up from 32.6% a year ago. These lower-priced homes usually go to investors using cash. Cash-transactions accounted for 41.3% of all August home sales in the region, up from 37.6% in July.
Lower-priced homes are usually REO, or had been foreclosed on previously and since taken by the lender. According to a study by Arizona State University, 67% of Phoenix sales in August were REO.
Arizona currently has the third highest foreclosure rate in the country, according to RealtyTrac, which tracks the data. In August, one in 165 Arizona homes received a foreclosure notice.
According to DataQuick, lenders foreclosed on 5,669 homes in August, 28.3% more than a year ago but down 1% from July.
This article has been republished from HousingWire. You can also view this article at HousingWire, a mortgage and real estate news site.