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2009 Marked Record Number of Foreclosures in Phoenix Area
TEMPE, Ariz. — The Phoenix-area real estate market set a new record for foreclosures in 2009. According to the latest Realty Studies report from the W. P. Carey School of Business at Arizona State University, about 41,000 single-family homes were foreclosed on last year, more than any other year on record. More than 35 percent of existing-home transactions in the market were foreclosures.
“The Phoenix-area housing market is in transition, so we’re seeing a lot of activity overall,” says Associate Professor of Real Estate Jay Butler, who authored the new report. “The last time we saw this much activity was back in 2005, just before the market hit its peak, but that was driven by sales due to rising home values and a type of euphoria about real estate investment. Now we’re seeing a totally different type of activity driven by foreclosures.”
In December alone, more than 4,000 Phoenix-area homes were foreclosed on. That’s up from just under 3,000 foreclosures in November. Last month, 67 percent of the activity in the Valley housing market consisted of foreclosures and the resales of previously foreclosed-on properties. That leaves many wondering about the timing of a recovery.
“Recovery is a perception issue,” explains Butler. “Some people believe they will see recovery when their home values are back where they were, and that’s going to take a long time. As for the economic recovery, Phoenix-area layoffs are still coming, and there’s an expectation interest rates may get higher, so the housing market will probably bounce around for a while longer.”
The median price of a single-family Phoenix-area home went down in December to $140,000. In November, the median was $143,000. In December 2008, the median price was similar at $146,000.
More than 5,700 Valley homes were resold last month. That’s slightly up from more than 5,300 resales in November and way up from more than 4,300 resales the year before, in December 2008.
The number of foreclosures in the condominium/townhouse market is also way up over the previous year. In December 2009, about 600 condos and townhomes were placed in foreclosure. The previous December had less than half that number at 285 condo/townhome foreclosures.
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.
W. P. CAREY SCHOOL OF BUSINESS
The W. P. Carey School of Business at Arizona State University is one of the top-ranked and largest business schools in the United States. The school is internationally regarded for its research productivity and its distinguished faculty members, including a Nobel Prize winner. Students come from 75 countries and include more than 60 National Merit Scholars. For more information, please visit wpcarey.asu.edu and http://knowledge.wpcarey.asu.edu.