While the Phoenix median home price is still about half of what it was in 2006, sales transactions in April rose again for the second consecutive month. In addition, the portion of sales that were related to foreclosure or default properties dropped significantly, when compared with the same period last year. See the following article from DQNews for more on this.
Phoenix region home sales rose to a four-year high in April and posted an above-average gain over March as first-time buyers and investors continued to dominate the sub-$200,000 market. The region’s overall median sale price rose above the year-ago level for the second consecutive month, reflecting widening price stability and fewer foreclosures and other properties selling below $100,000, a real estate information service reported.
Buyers paid a median $135,889 last month for all new and resale houses and condos that closed escrow in the Phoenix metro area, up 0.7 percent from March and up 8.7 percent from $125,000 a year ago, according to MDA DataQuick of San Diego, which tracks real estate trends nationally via public property records.
In March, the median rose 3.9 percent above a year ago, and in February it was the same as a year earlier. Prior to February, the median had fallen on a year-over-year basis for 36 consecutive months.
The April median was still 48.5 percent short of the peak $264,100 median reached in June 2006. Last month’s figure was also lower than the 12-month high for the median, which was $142,700 last November. The post-housing-boom low for the median was $125,000 in April 2009.
The median paid last month for resale single-family detached houses held at $135,000, the same as in March and up 14.4 percent from a year earlier. It was the third consecutive month in which the median for existing detached houses rose year-over-year. However, last month’s figure was still 49.6 percent lower than the $268,000 peak in June 2006.
The median paid for resale condos in April was $92,000, down 2.1 percent from March and down 20.0 percent from a year earlier. The April resale condo median was 50.7 percent lower than the $186,500 peak in April 2007.
An alternative price gauge rose on a year-over-year basis for the third consecutive month: In April the median paid per square foot for resale single-family (detached) houses was $75, the same as in March and up 17.2 percent from a year earlier. However, the figure remained 56.1 percent below the $171 peak in June 2006.
The annual gains in various price measures indicate widening price stability or price pressures in some segments of the market, especially in the more affordable areas most in demand among first-time buyers and investors. But the regional median has also been influenced by shifts in the types of homes selling.
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One of the most noticeable changes in the mix of sales this year versus last year is the decline in foreclosure resales: Last month they represented 50.5 percent of the resale market, compared with 64.9 percent a year earlier. The peak for foreclosure resales was 66.2 percent in March 2009. In the past, foreclosed properties tended to sell at a discount and were located in some of the most affordable areas. Over the past year foreclosure activity that had mainly stemmed from outrageously risky subprime loans has eased, and lenders have increasingly steered distressed borrowers into foreclosures alternative such as short sales and loan modifications. It’s left fewer foreclosures on the market of late, but that situation could change if lenders decide to push more of the distress back into the formal foreclosure process.
Another significant change from last year: Today a smaller percentage of sales occurs below $100,000 – and especially below $50,000. Last month 29.5 percent of homes sold for less than $100,000, compared with 37.9 percent a year earlier. Last month’s sales below $50,000 represented 6.6 percent of all sales, compared with 12.5 percent a year ago. Meantime, the portion of sales between $100,000 and $200,000 has shot up, representing 43.1 percent of sales last month compared with 37.1 percent a year ago.
The combination of lower prices, low mortgage rates and the allure of the recently expired federal home buyer tax credit helped drive last month’s home sales higher than in March and April 2009. (Most buyers who rushed last month to meet the April 30 federal tax credit deadline to sign a sales contract wouldn’t close escrow until May or June).
Last month a total of 9,972 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area, up 3.6 percent from the month before and up 10.7 percent from a year earlier.
A rise in sales between March and April is normal for the season, with that gain averaging 1.9 percent since 1994, when DataQuick’s complete Phoenix-area statistics begin.
April’s total sales were the highest for that month since April 2006, when 12,669 homes sold. However, last month’s sales total was still 7.7 percent lower than the average April tally since 1994.
Total resales – existing houses and condos combined – were the highest for an April since 2005.
Existing (not new) condo sales saw the biggest annual gain last month, rising 68.7 percent from a year ago. In April, condos were 12.0 percent of total sales, compared with 7.9 percent a year ago.
The number of newly built homes sold in April rose 6.3 percent compared with March and rose 12.3 percent from a year ago. Still, last month’s new-home sales were the second-lowest for an April in more than a decade as builders continued to struggle to compete with low-cost distressed sales.
How the Phoenix-area housing market will shape up over the next year will depend largely on the strength of the local job market, as well as on the magnitude and timing of future foreclosures and the market’s response to waning government stimulus. It’s also possible that later this year or in 2011 the market will encounter a headwind from rising interest rates, which have been hovering near historic lows.
Meanwhile, investors and first-time buyers continue to fuel most of the Phoenix-area sales activity.
In April, 46.9 percent of all Phoenix-area home purchase loans were government-insured FHA mortgages, a popular choice for first-time buyers, according to an analysis of public property records. The median price paid for a home purchased with an FHA loan last month was $135,000 – the same as a year earlier.
Absentee buyers purchased 39.4 percent of all homes sold in April – roughly the same as in March and a year earlier – and paid a median $120,000 last month, up from $118,000 in March and $102,188 a year ago. Absentee buyers are mainly investors, but 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.
Buyers who appear to have used cash to purchase their homes accounted for 37.2 percent of all April sales, down from 39.1 percent in March. Last month’s cash buyers paid a median of $112,000, up from $108,600 in March and $81,425 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 these buyers might be taking 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.
Last month about 3.7 percent of all homes sold had been “flipped,” meaning they had previously been sold on the open market between three weeks to six months prior. In March the flipping rate was 3.4 percent, while in April 2009 it was 1.9 percent.
Meantime, on the foreclosure front: Last month 5,187 house and condo units were foreclosed on, down 13.6 percent from March but up 47.1 percent from April 2009. For the first four months of this year, 20,754 housing units were lost to foreclosure, up 15.7 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 foreclosure filings has seesawed over the past year, 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.