Phoenix Area October Home Sales
Phoenix region home sales rose in October amid big year-over-year gains in the number of transactions over $200,000, which compensated for sharp declines in sales of lower-cost homes. The impact of foreclosure resales continued to wane, helping the median sale price rise to its highest level in nearly four years, a real estate information service reported.
Buyers paid a median $160,000 for all new and resale houses and condos sold during October in the combined Maricopa-Pinal counties metro area – the highest level since the median was $162,984 in November 2008. The October median rose 3.2 percent from September and rose 32.2 percent from October 2011. It was the median's 11th consecutive month with a year-over-year gain, according to San Diego-based DataQuick, which tracks real estate trends nationally via public property records.
The October median was 39.4 percent below the Phoenix area's all-time peak of $264,100 in June 2006, but it was 35.2 percent higher than the median’s post-peak trough of $118,347 in August 2011.
The relatively large year-over-year gains in the region's median sale price since March – ranging from 13.8 percent to 32.2 percent – reflect several trends. Prices have risen as greater demand has met a relatively low supply of homes for sale. But the median has also been pushed higher by a big shift in the types of homes selling this year compared with last. More are higher-cost move-up homes and fewer are lower-cost foreclosed properties.
If lenders eventually move more aggressively to clear their backlogs of distressed properties, then the inventory of homes on the market would rise, putting downward pressure on home prices. Regardless, if demand remains high and prices continue to rise, the market will eventually respond with a larger supply of homes for sale, which would tame price appreciation. More would-be sellers who've so far 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. There will be more sales of newly built homes, which in October rose 75.8 percent from a year earlier, to the highest level for an October since 2009.
The continuing decline in the number of lender-owned properties on the market this year helps explain the region’s thin inventory of homes for sale. Foreclosure resales, defined as homes that were foreclosed on in the prior 12 months, fell to 18.9 percent of all homes that resold in October. That was the lowest level for any month since January 2008, when foreclosure resales were 18.6 percent of the resale market. October’s foreclosure resale level was down a hair from 19.0 percent the month before and down from 43.0 percent a year earlier. At their peak in March 2009, foreclosure resales represented 66.2 percent of all the homes sold in the Phoenix area.
Last month a total of 8,837 new and resale houses and condos closed escrow in the two-county Phoenix region, up 12.7 percent from the month before and up 9.8 percent from a year earlier.
On average, the number of homes sold in October has been 1.4 percent higher than in September since 1994, when DataQuick’s complete Phoenix region statistics begin.
Last month's total sales were 4.8 percent below average for the month of October. Resales of houses and condos combined were 9.0 percent above the historical average for October, while sales of newly built homes were 47.9 percent below average for an October.
Sales continued to fall sharply in the Phoenix-area’s lowest price ranges, while the middle and upper-price categories logged large gains. The number of new and resale homes sold in October for less than $100,000 dropped 40.3 percent from a year earlier, while sub-$150,000 sales fell 19.2 percent. Deals between $200,000 and $400,000 rose 67.8 percent year-over-year, while $300,000-plus transactions shot up 74.3 percent year-over-year and sales above $500,000 rose 61.0 percent. The number of homes selling for $800,000 or more rose 50.6 percent from the same month last year.
Other Phoenix region October highlights: