Sales of existing houses and condos in the Phoenix area rose in June to the highest level for that month in four years, with the non-foreclosure market continuing to account for a greater portion of sales. A small shift away from lower-cost bank owned homes helpedthe overall median sale price to edge higher than the prior month for the second month in a row, according to MDA Dataquick.
In June, 60.8 percent of the Phoenix-area houses and condos that resold had been foreclosed on in the prior 12 months, down from 64 percent in May and the lowest since such foreclosure resales were 58.6 percent of all resales last November. Foreclosure resales hit a high of 66.2 percent this March.
A total of 10,731 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area in June, up 12.2 percent from May and up 40.4 percent from a year ago. Total home sales have risen on a year-over-year basis for six consecutive months. However, sales of existing (not new) houses and condos combined have risen on a year-over-year basis for 12 consecutive months, and the June resale total of 9,720 was the highest for any month since March 2006.
Last month’s year-over-year gains in house and condo resales offset a 50 percent annual decline in sales of newly constructed homes. The 1,011 new homes that builders sold last month marked the lowest new-home tally for a June in more than a decade.
The median price paid last month for all new and resale houses and condos combined was $130,000, up 0.4 percent from May but down 36.6 percent from a year ago. The tiny month-to-month gain was the second in a row. May’s 3.5 percent increase over April’s median marked the first such month-to-month rise since the overall median rose 1 percent, to $256,000, in March 2007.
In the Phoenix region and elsewhere in the West, various median sale price measures have flattened or begun to rise mildly in concert with a decline in the portion of resales that were foreclosures, which tend to sell at a discount. Another factor putting upward pressure on the median: the normal spring-summer increase in the number of people purchasing homes not just because they perceive them as a great deal – a “bargain” – but because they need to move for a new job, more space or to re-situate the family before school restarts.
Over the past year, and especially over the winter, stronger home sales across much of the West have been driven mainly by bargain hunters. Most are first-time buyers and investors choosing either foreclosure resales or other lower-cost homes. Last month about 45 percent of all Phoenix-area buyers used government-insured FHA loans, a popular choice among first-time buyers, according to an analysis of public property records. Absentee buyers made up 39.6 percent of all purchases – a relatively high percentage in the West. Absentee buyers include investors, mainly, as well as others who will have their property tax bills go to an address other than the one for the home they just purchased.
Across the West, year-over-year declines in the median sale price – the point where half of the homes sold for more and half for less – have sometimes overstated the extent to which the value of the typical home has fallen. It’s because the median is being tugged lower not just by price depreciation but by shifts in the types of homes selling. For example, compared with past years more of today’s sales involve foreclosures, which tend to sell at a discount and be concentrated in more affordable areas. Also, the August 2007 credit crunch made larger “jumbo” mortgages more expensive and harder to obtain, which has led to sluggish sales – in some cases the lowest in many years – in higher-priced neighborhoods. (A dropoff in high-end sales can pull down the median.)
Arizona is not alone with these back to back sales gains month after month… as the states that led the country in the sub-prime market blow up (California, Arizona, Nevada and Florida) are also the states that are leds the recovery. There are still plenty of foreclosures out there, and more to come through the system, but as fast as they are coming in, there are buyers to snatch them up. Some foreclosures got for rock bottom wholesale prices, others go for full value…. my goal is to show you how to cut through maze and find and close only those wholesale deals.
Can’t wait to share with you the details this Wednesday, in my Free Foreclosure Investor Webinar and Conference Call at 6pm PDT, 9pm EST. You must register early as our free spots are very limited. Call 800-310-7730 x2 or go here asap: http://www.foreclosures.com/pages/TeleConf.asp
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