Phoenix region home sales fell in September amid a continuing decline in foreclosure resales and sub-$200,000 transactions. The median sale price inched up from August and approached a four-year high, the result of affordability driven demand meeting a tight supply of homes for sale, as well as a sharp rise in mid- to high-end deals, a real estate information service reported.
In September, buyers paid a median $155,000 for all new and resale houses and condos sold in the combined Maricopa-Pinal counties metro area – the highest level since the median was $162,984 in November 2008. The September median rose 0.6 percent from August and rose 24.1 percent from September 2011. It was the tenth 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 September median was 41.3 percent below the Phoenix area's all-time peak of $264,100 in June 2006, but it was 31.0 percent higher than the median’s post-peak trough of $118,347 in August 2011.
The region’s relatively large year-over-year gains in the median sale price in recent months – ranging from 13.8 percent to 30.2 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 September rose 11.2 percent from a year earlier, to the highest level for a September 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, dipped to 19.0 percent of all homes that resold last month. That was the lowest for any month since January 2008, when foreclosure resales were 18.6 percent of the resale market. September’s foreclosure resale level fell from 19.2 percent the month before and 44.4 percent a year earlier. At their peak in March 2009, foreclosure resales represented 66.2 percent of the Phoenix area's resale market.
Last month a total of 7,840 new and resale houses and condos closed escrow in the two-county Phoenix region, down 14.6 percent from the month before and down 9.5 percent from a year earlier.
A dip in sales between August and September is normal for the season, but this year’s decline was exacerbated by the relatively low number of business days in September. The month started and ended with a weekend, reducing the number of days on which sales could be recorded. The average number of sales recorded daily this September was about even with September 2011, and up slightly from this August, which had four more business days than September. On average, September home sales have fallen 7.1 percent from August since 1994, when DataQuick’s complete Phoenix region statistics begin.
Last month's total sales were 15.6 percent below average for the month of September. Resales of houses and condos combined were 2.4 percent lower than the historical average for September, while sales of newly built homes were 57.3 percent below average for a September.
Sales continued to fall sharply in the Phoenix-area’s lowest price ranges, while the middle and upper price categories saw gains. The number of new and resale homes sold in September for less than $100,000 dropped 44.8 percent from a year earlier, while sub-$150,000 sales fell 28.1 percent. Deals between $200,000 and $400,000 rose 20.6 percent year-over-year, while sales above $500,000 rose 22.0 percent. Sales over $800,000 rose 12.0 percent from a year earlier.
Other Phoenix region September highlights:•A key price gauge analysts watch, the median price paid per square foot for existing single-family detached houses, rose to $87 in September, up from $85 in August and up 29.9 percent from a year earlier. The September figure was the highest since it was $92 in October 2008. The median paid per square foot has risen year-over-year for ten consecutive months, but in September it remained 49.1 percent below the $171 peak in May and June of 2006.
•At the county level in September, the median price paid per square foot for resale single-family detached houses in Maricopa County was $91, up 3.4 percent from the prior month and up 30.0 percent from a year earlier. It was the tenth consecutive month with a year-over-year gain. The Pinal County median paid per square foot was $63 last month, the same as the prior month and up 34.0 percent from a year earlier, marking the 12th consecutive month with a year-over-year gain.
•Buyers with a foreign mailing address in the public record accounted for 2.4 percent of total Phoenix-area home sales in September, and 5.6 percent of condo resales. (Note: Not all foreign buyers use a foreign mailing address).
•Last month 14.1 percent of all homes sold in the Phoenix area were purchased by buyers based outside of the region, while 13.1 percent were bought by buyers based in other states. Buyers from California bought about 4 percent of all homes sold in September and represented about 27 percent of the buyers based outside of the Phoenix metro area. The other most common home states for out-of-region buyers were Washington, representing 9.4 percent of purchases by out-of-region buyers; Arizona (outside of the Phoenix area) with 6.9 percent; Colorado, with 6.5 percent; Illinois, with 5.0 percent; and Oregon and Texas, which each represented 3.3 percent of the out-of-region buyers.
•Lenders foreclosed on 2,112 Phoenix-area houses and condo units last month, down 31.0 percent from the month before and down 33.0 percent from a year earlier. The number of homes lost to foreclosure between January and September this year totaled 22,112, down 48.3 percent from the same period last year.
•Absentee buyers, who are mainly investors and vacation-home buyers, bought 38.6 percent of all Phoenix-area homes sold last month, down from 39.7 percent the month before and down from 42.6 percent a year earlier. The peak was 47.1 percent in March 2011. September’s absentee buyers paid a median $120,000, up from $119,000 the month before and up 20.0 percent from $100,000 a year earlier.
•Buyers paying cash bought 39.6 percent of all homes sold last month. That was down from 40.2 percent the prior month and up from 39.0 percent a year earlier. The record for cash buying was 48.0 percent in February 2011. September’s cash buyers paid a median $120,000, up from $119,000 the month before and up 37.9 percent from $87,000 a year earlier.
•Home flipping in the Phoenix area has risen sharply this year. Homes that had sold twice on the open market within a six-month period represented 7.5 percent of all sales in September. That was down slightly from a flipping rate of 7.7 percent in August and up from 4.4 percent a year earlier.
•The market share for government-insured FHA home loans, a popular choice among first-time buyers, fell to 24.7 percent of all home purchase loans in September – the lowest level since February 2008, when it was 20.7 percent. September’s FHA share of purchase loans was down from 27.0 percent the month before and down from 34.2 percent a year earlier.
To view the home sale chart, visit DQNews.com.
Media calls: Andrew LePage (916)456-7157 or firstname.lastname@example.org
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