Although the number of resale home sales is increasing, it was mainly due to foreclosure sales. There was a total of 6,490 single family detached home resales in March according to the report written by Jay Butler, associate professor of real estate at the W.P. Carey School of Business at Arizona State University. Out of the 6,490 sales, 4,370, or 67.3 percent were foreclosures. I don't know how much higher this can go, but if it weren't for foreclosures, there would have only been 2,120 resales in March, which would be significantly lower than the norm for this time of year, which is the beginning of the seasonal increase of sales through August.
This goes to show you that the foreclosures are holding back a true recovery. Obviously if it wasn't for the foreclosures, we would be in a much slower market, which would actually add to a faster recovery, and a faster increase in home values. Unfortunately, the number of foreclosures is not going to decrease anytime in the near future. The 4,370 foreclosures for March was a record for the valley, surpassing the old record of 4,200 set in July of 2009. Another reason for the increase in total home sales for March may be the fact that the homebuyer federal tax rebate is coming to an end April 30th. The good thing is the median sales price has been steadily increasing over 2009 stats, and is up 9.3 percent over March 2009, when the median sales price was $127,000.
In order for the Phoenix Metropolitan single family resale market to reach a point of stabilization, there must be a huge decrease in the number of foreclosures. Some things that will impact the foreclosure market are job and income growth, the remaining number of adjustable rate mortgages still expected to reset in the next year or two, and the amount of shadow inventory that has yet to hit the housing market.
Here's a graph of how some of the cities fared:
|CITY||MARCH 2010 RESALES||% CHANGE FROM 2009||MARCH 2010 MEDIAN||% CHANGE FROM 2009||MARCH 2010 FORECLOSURES||% CHANGE FROM FEBRUARY 2010|
Folks, we're getting closer, but we're not out of the woods yet.