Phoenix Area July Home Sales
The number of homes sold in the Phoenix region changed little last month compared with a year ago as low-end activity continued to fall sharply and $200,000-to-$600,000 transactions soared. Foreclosure resales dropped to a nearly 4.5-year low, helping the median sale price rise 25 percent from a year earlier, a real estate information service reported.
In July, buyers paid a median $150,000 for all new and resale houses and condos sold in the combined Maricopa-Pinal counties metro area. That was down 1.3 percent from June and up 25.0 percent from July 2011, marking the eighth consecutive month with a year-over-year gain, according to San Diego-based DataQuick. The company tracks real estate trends nationally via public property records.
The 25.0 percent year-over-year increase in the July median sale price followed annual gains of 23.1 percent in June, 25.0 percent in May, 18.3 percent in April, 13.8 percent in March, and 7.5 percent in each of the prior three months.
July’s median stood 43.2 percent below the Phoenix area's all-time peak of $264,100 in June 2006, but it was 26.7 percent higher than the median’s post-peak trough of $118,347 in August 2011. This June's median of $152,000 was the highest for any month since the median was $154,000 in December 2008.
The large year-over-year gains in the median sale price in recent months reflect several trends:
- Increased pressure on home prices. Higher demand has been triggered by ultra-low mortgage rates at the same time the supply of homes for sale has fallen sharply.
- There's been a big drop in the portion of resales that are foreclosed properties, which tend to carry significant discounts and be concentrated in lower-cost areas.
- Mid- to high-end neighborhoods have represented a larger share of total sales.
If lenders eventually move more aggressively to clear their backlogs of distressed properties, then the inventory of homes on the market would rise, creating downward pressure on home prices. Regardless, if demand remains high and prices continue to edge higher, the market will eventually respond with a greater supply of homes for sale, which would tame price appreciation. More would-be sellers who've been reluctant to put their homes on the market will try to sell. Fewer people will owe more on their mortgages than their homes are worth, enabling them to sell. Builders will continue to boost sales, which this July rose 34.3 percent from a year ago and were the highest for a July in three years.
A decline in lender-owned properties on the market this year is one of the main reasons for the much thinner inventory of homes for sale. Foreclosure resales, defined as homes that were foreclosed on in the prior 12 months, dropped to 19.5 percent of all homes that resold last month – the lowest for any month since January 2008. July’s foreclosure resale level fell from 21.3 percent the month before and 49.7 percent a year earlier. At their peak, foreclosure resales represented 66.2 percent of the Phoenix area's resale market in March 2009.
Last month a total of 8,949 new and resale houses and condos closed escrow in the two-county Phoenix region, down 6.5 percent from the month before and up 0.2 percent from a year earlier. A dip in activity between June and July is normal for the season. On average, July home sales have fallen 7.1 percent from June since 1994, when DataQuick’s complete Phoenix region statistics begin.
Total home sales in July were the highest for that month since 2009 and were 10.5 percent short of the average number sold in the month of July since 1994. Last month's new-home sales were nearly 61 percent below average for a July. Resales of houses and condos combined were 3.7 percent higher than the historical average for the month of July.
Sales continued to fall hard in the lower price ranges last month. The number of new and resale homes that sold in July for less than $100,000 dropped 35.3 percent from a year earlier, while sub-$150,000 sales fell 20.4 percent. Deals between $200,000 and $400,000 rose 46.9 percent year-over-year, while sales above $500,000 rose 8.0 percent. Sales over $800,000 declined 2.6 percent from a year earlier.
Other Phoenix region July highlights:
- A key price gauge analysts watch, the median price paid per square foot for existing single-family detached houses, was $83 in July, down from $84 in June and up 27.7 percent from a year earlier. The median paid per square foot has risen year-over-year for eight consecutive months. The July figure stood 51.4 percent below the $171 peak median paid per square foot in May and June of 2006.
- At the county level in July, the median price paid per square foot for resale single-family detached houses in Maricopa County was $86, down 1.1 percent from the prior month and up 24.0 percent from a year earlier. It was the eighth consecutive month with a year-over-year gain. The Pinal County median paid per square foot was $61 last month, up 1.7 percent from the prior month and up 36.1 percent from a year earlier, marking the 10th consecutive month to see a year-over-year gain.
- Short sales, where the sale price fell short of what was owed on the property, represented an estimated 12.8 percent of last month’s resale activity. That was down from an estimated 13.7 percent for June and down from 14.0 percent a year earlier.
- Lenders foreclosed on 2,301 Phoenix-area houses and condo units last month, up 10.5 percent from the month before and down 38.3 percent from a year earlier. The number of homes lost to foreclosure between January and July this year totaled 16,888, down 51.5 percent from the same period last year.
- Absentee buyers, who are mainly investors and vacation-home buyers, bought 41.6 percent of all Phoenix-area homes sold last month, up from 39.3 percent the month before and down from 45.3 percent a year earlier. The peak was 47.1 percent in March 2011. Last month, absentee buyers paid a median $118,000, down from $121,000 the month before and up 18.1 percent from a year earlier.
- Buyers paying cash bought 43.4 percent of all homes sold last month. That was up from 41.4 percent the prior month and 40.0 percent a year earlier. The record for cash buying was 48.0 percent in February 2011. Last month’s cash buyers paid a median $117,000, down from $120,000 the month before and up 34.5 percent from a year earlier.
- The market share for FHA home loans, a popular choice among first-time buyers, held at a more-than-four-year low. Last month 26.1 percent of all Phoenix-area home purchase loans were government-insured FHA mortgages, down from 26.2 percent the month before and down from 33.7 percent a year earlier. Last month’s figure was the lowest since the FHA share of the purchase loan market was 25.3 percent in March 2008.
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