Phoenix Region July Home Sales

Phoenix-area home sales climbed above a year ago for the seventh consecutive month in July but dipped below June as purchases of foreclosed properties continued to wane. The region’s decreasing reliance on sales of heavily discounted, lender-owned homes helped the median sale price inch higher for the third consecutive month, a real estate information service reported.

In July, 57.8 percent of the Phoenix-area houses and condos that resold had been foreclosed on in the prior 12 months, down from 64 percent in June and the lowest since such foreclosure resales were 54.7 percent of all resales last October. Foreclosure resales hit a high of 66.2 percent this March, according to MDA DataQuick, a San Diego-based firm that tracks real estate trends nationally via public property records.

A total of 10,288 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area in July, down 4.1 percent from June but up 27.7 percent from a year ago. Total home sales were the highest for the month of July since 2006.

Sales of existing (not new) houses and condos combined rose on a year-over-year basis for the 13th consecutive month. Last month’s gains in the resale market offset a 45.4 percent annual decline in sales of newly constructed homes. The 1,029 new homes that builders sold last month marked the lowest new-home tally for a July in more than a decade.

The median price paid last month for all new and resale houses and condos combined was $132,500, up 1.9 percent from June but down 32.1 percent from a year ago. The month-to-month gain was the third in a row. The median has edged slightly higher each month since it hit a decade low of $125,000 in April.

The median has risen month-to-month for two reasons, mainly: Lender-owned, discounted foreclosures have represented a lower portion of homes sold, reflecting lower foreclosure levels earlier this year. And more buyers this spring and summer have fallen into the traditional, seasonal category of people, including move-up buyers, looking for the right home in the right location – not just the ultimate bargain. Many families try to move before school starts.

July’s $132,500 overall median stood 49.8 percent below the Phoenix area’s peak $264,100 median reached in June 2006. The median has fallen on a year-over-year basis for 30 consecutive months.

An alternative price gauge analysts watch has shown a flattening and upward trend in recent months: The median paid per square foot for existing single-family (detached) houses rose to $69 in July, up from $67 in June and up from $64 in both April and May. However, July’s median paid per square foot was still down 35.3 percent from a year ago and down 59.6 percent from a peak $171 in June 2006.

The Phoenix region continues to rely heavily on first-time buyers and investors. Last month 47.5 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 42.5 percent of all purchases – a relatively high percentage in the West. Absentee buyers are mainly investors and second-home buyers but could include any others who indicate at the time of sale that the property tax bill will go to a different address.

There were signs in Phoenix and other parts of the West last month that credit was loosening up a bit. The use of adjustable-rate mortgages (“ARMs”) to buy homes rose slightly in July to 3.1 percent of all purchase loans, up from 2.1 percent in June and a decade low of 1.4 percent in April this year. However, July’s purchase ARM level was down from 8.7 percent a year ago and down from a monthly average this decade of 27.8 percent.

Foreclosures will play a major role in Phoenix’s housing market for the foreseeable future. In July, 5,816 houses and condos were lost to foreclosure in the two-county region, up slightly from June and up 25.8 percent from a year ago. It was the highest monthly total since foreclosures began to surge in 2006. The figures are based on the number of trustees deeds filed with the county recorder’s office. The document signals that a home was lost to foreclosure.

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.)

Phoenix MSA

Number of sales	Jul-08	Jul-09	%Chng
Resale houses	5,624	8,267	47.00%
Resale condos	547	992	81.40%
New homes	1884	1029	-45.40%
All homes	8,055	10,288	27.70%

Median sale price	Jul-08	Jul-09	%Chng
Resale houses	$192,450	$129,100	-32.90%
Resale condos	$165,000	$101,000	-38.80%
New homes	$207,658	$175,000	-15.70%
All homes	$195,000	$132,500	-32.10%

Media calls: Andrew LePage (916) 456-7157