Phoenix Region September Home Sales

The Phoenix area logged a rare increase in home sales last month over August as first-time buyers and investors continued to dominate the market. Foreclosure resales waned again, which helped the median sale price continue a string of modest month-to-month gains that began in May, a real estate information service reported.

Last month 56.5 percent of the houses and condos that resold had been foreclosed on in the prior 12 months, down from 57.2 percent in August and the lowest since such foreclosure resales were 54.7 percent 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 8,886 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area in September, up 3.6 percent from August and up 12.9 percent from a year ago. Total home sales have increased on a year-over-year basis for nine consecutive months. However, last month’s 12.9 percent annual sales gain was the lowest for any month since February.

Last month’s sales were the highest for a September since September 2006, when 11,213 homes sold.

The unusual rise in sales last month from August was seen elsewhere in the West. Since 2000, Phoenix sales have only increased from August to September one other time – last year – and the average change between those two months is a 6.5 percent decline.

Last month’s sales strength was likely the result of three factors: Short sales became more popular this summer and they take longer to close, meaning some deals that normally would have closed in August instead closed in September. Sales were also driven higher by the allure of historically low mortgage rates and the chance to take advantage of the soon-to-expire federal tax credit for first-time buyers.

The median price paid last month for all new and resale houses and condos combined was $137,000, up 1.5 percent from $135,000 in August but down 23.3 percent from $178,607 a year ago.

September’s $137,000 overall median was 48.1 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 32 consecutive months.

The median sale price began to edge higher month-to-month this year after dropping to a decade low of $125,000 in April. The median’s gradual ascent began shortly after the percentage of resales involving foreclosures started to decline this spring. Foreclosures have often been the most aggressively priced and most concentrated in the more affordable neighborhoods – areas where during the housing boom many buyers had stretched to purchase homes with risky subprime loans. Even absent price appreciation, a decline in foreclosure resales puts upward pressure on the median sale price, just as the huge run-up in foreclosure resales over the past two years spurred dramatic declines in the median.

An alternative price gauge has inched higher month-to-month since June: The median paid per square foot for existing single-family (detached) houses rose to $71 in September, up from $70 in August but down 27.9 percent from a year earlier and down 58.5 percent from a peak $171 in June 2006.

First-time buyers and investors remained the market’s lifeblood. Last month 46.7 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 38.5 percent of all purchases – a relatively high percentage in the West. Absentee buyers are mainly investors, but include second-home buyers and others who indicate at the time of sale that the property tax bill will go to a different address.

Foreclosures trended lower for the third consecutive month as lenders and servicers channeled more distress into two alternative avenues: short sales and loan modifications. In September, the number of single-family houses and condos foreclosed on fell to 4,141, down 6.2 percent from August and down 14.3 percent from a year earlier. It was the lowest monthly foreclosure total since 3,525 foreclosures in April this year. 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.

Phoenix MSA

Number of sales	Sep-08	Sep-09	%Chng
Resale houses	5,462	7,025	28.60%
Resale condos	473	815	72.30%
New homes	1935	1046	-45.90%
All homes	7,870	8,886	12.90%

Median sale price	Sep-08	Sep-09	%Chng
Resale houses	$174,925	$132,000	-24.50%
Resale condos	$145,500	$101,000	-30.60%
New homes	$198,233	$185,000	-6.70%
All homes	$178,607	$137,000	-23.30%

Media calls: Andrew LePage (916) 456-7157