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TEMPE, Ariz. — The Phoenix-area housing market is getting extremely busy, but the news is not all good. In March, the existing-home market saw more activity and foreclosures than it has since last July. The latest Realty Studies report from the W. P. Carey School of Business at Arizona State University explains why.
“Historically, March is the portal month for the resale home season that usually lasts until August,” says Associate Professor of Real Estate Jay Butler, who authored the new report. “During this time, sales and median prices tend to increase as the buyers move to lock in a purchase before the start of schools, vacations and holidays. However, beyond the traditional rebound, March activity was driven by a diverse set of factors, including increased foreclosure activity, bargain hunters, short sales and the federal income tax credit for qualified home buyers.”
This March, almost 6,500 single-family homes were resold in the Phoenix area. That’s way up from just over 4,600 in February and about 5,900 in March of last year.
Foreclosures remained a major force in the market. Foreclosures and the resales of foreclosed-on homes accounted for 64 percent of the existing-home market activity. Almost 4,400 new foreclosures happened in March. That’s way up from just over 3,300 in February and about 2,700 in March of last year.
“Future foreclosure activity will be impacted by the level of job/income growth that could affect the ability of households to maintain their homes and a large number of adjustable-rate mortgages that are expected to reset in the coming months,” says Butler. “Further, homeowners, confronted with declining neighborhood values and restrictive debt amounts, could decide to walk away from their homes, especially after the end of the school year.”
The median price of single-family homes resold in the Valley was $142,500 in March. That’s up from $140,000 in February and only $127,000 last March.
In the condominium/townhouse market, things still look pretty bleak. More than 650 condos and townhomes in Maricopa County were foreclosed on in March. That’s up from 500 in February, and it’s more than twice the number of foreclosures last March, which was 295. The median condo/townhome price is now $94,000, down from $115,000 in March of last year.
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.