Phoenix Home Sales Rebound as Foreclosure Deals Evaporate

soldBuyers are taking advantage of foreclosure deals, especially in the outlying Phoenix metro area.  As predicted, areas hardest hit by the foreclosure market are rebounding.  A recent trip with buyers to Queen Creek and Maricopa found several great deals under $150,000 that the buyers were interested in.  However, every one of them was in a multiple offer situation.  Multiple offers that drove the prices up.  This is likely to lead to higher prices in these areas.

Prices are showing signs of levelling off as foreclosures decline in some areas.  Home sales soared in March, surpassing March of 2005 sales (the height of the sales boom). 

However, sales in Scottsdale and Paradise Valley aren’t seeing the same buying frenzy and prices there are likely to continue to fall.  In Paradise Valley there are currently about 550 homes for sale with only about 6 sales on average per month.  At that rate it would take over 7 years to sell every home compared to about one years worth of inventory in other parts of the Valley.

In March, pending home sales in the Valley hit 7,550 which was a 70% increase over last year at this time.  Pending sales are the major indicator of the housing market.  Interestingly, about 2/3 of all Valley home sales are foreclosure properties which is causing those foreclosure deals to evaporate.  When the foreclosure deals are gone, it will be great news for home sellers…not so great news for home buyers trying to catch the bargains they’ve heard about. 

Foreclosure homes are selling twice as fast as they did last fall.  Today a foreclosure sale is taking about 117 days compared to 227 days in November.  There were 3,377 foreclosure homes active on MLS in March compared to over 5,000 in February.  

The average price per square foot of a foreclosure home in the Valley is $66.  The Valley’s overall average price per square foot fell from $89 in February to $83 in March.  Median home prices fell from $136,000 to $129,000.  However, with our shrinking inventory, that number is likely to stabilize and even begin to rise.  April is likely to be the turning point. 

Welcome to the bottom of the Phoenix Real Estate Market.  It’s good to be here.

Comments

  1. The market is definitely turning around. Even firms specializing on acquisitions are making their move now. For instance, CBI Group, a real estate investment company has chosen Phoenix, AZ to acquire up to 175 single family homes. Their intention is to buy now as the market bottoms, hold the homes and rent them for five years, and sell the homes as the market recovers.

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