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TEMPE, Ariz. — The Phoenix area just hit an unfortunate record for 2010. According to a new report from the W. P. Carey School of Business at Arizona State University, 46 percent of the total transactions in the existing-home market last month were foreclosures. That’s the highest percentage recorded in any month this year. Unfortunately, the report’s author predicts even more trouble from foreclosures.
“The biggest issue is heightening uncertainty in the housing market throughout the country, brought about by the evolving problems within the foreclosure process,” says Associate Professor of Real Estate Jay Butler. “The potential impact could include foreclosure moratoriums, the availability of title insurance, the willingness of people to purchase foreclosed properties, and the public perception and acceptance of the entire home-financing process. In confronting potential uncertainty, the level of activity and prices could even be lower than generally expected as people await the review and resolution of the problems associated with the foreclosure process.”
The actual number of existing-home foreclosures in September was just over 4,100. It’s the highest number recorded since March and up slightly from about 4,000 in August. It’s also way up from fewer than 3,000 foreclosures last September.
Butler says the market experienced a bump up in home resales in September. That’s normal for the end of the annual selling season, when people are wrapping up summer vacations and children start to go back to school. About 4,900 homes were resold in the Phoenix area in September. That’s up from 4,800 resales in August, but it’s still way down from more than 6,100 resales in September of last year.
The median home-resale price for September was $135,000, the same as in August. It’s down from $140,000 last September.
Butler explains, “Another influence on the market is that, for the last year, approximately 40 percent of the traditional resales were foreclosed homes sold again with a median price markdown of 14 percent from the foreclosed price.”
In the townhouse/condominium segment of the market, more than 550 foreclosures happened in September. That’s down from 630 in August, but still up from 410 last September. The median resale price of a townhome/condo in the Phoenix area was $75,000 in September, a step down from $80,000 in August, and a huge step down from $100,000 last September.
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.