Phoenix Metro Area April Home Sales
Phoenix region home sales rose to a four-year high in April and posted
an above-average gain over March as first-time buyers and investors continued to
dominate the sub-$200,000 market. The region’s overall median sale price rose
above the year-ago level for the second consecutive month, reflecting widening
price stability and fewer foreclosures and other properties selling below
$100,000, a real estate information service reported.
Buyers paid a median $135,889 last month for all new and resale houses and
condos that closed escrow in the Phoenix metro area, up 0.7 percent from March
and up 8.7 percent from $125,000 a year ago, according to MDA DataQuick of San
Diego, which tracks real estate trends nationally via public property records.
In March, the median rose 3.9 percent above a year ago, and in February it
was the same as a year earlier. Prior to February, the median had fallen on a
year-over-year basis for 36 consecutive months.
The April median was still 48.5 percent short of the peak $264,100 median
reached in June 2006. Last month’s figure was also lower than the 12-month high
for the median, which was $142,700 last November. The post-housing-boom low for
the median was $125,000 in April 2009.
The median paid last month for resale single-family detached houses held at
$135,000, the same as in March and up 14.4 percent from a year earlier. It was
the third consecutive month in which the median for existing detached houses
rose year-over-year. However, last month’s figure was still 49.6 percent lower
than the $268,000 peak in June 2006.
The median paid for resale condos in April was $92,000, down 2.1 percent from
March and down 20.0 percent from a year earlier. The April resale condo median
was 50.7 percent lower than the $186,500 peak in April 2007.
An alternative price gauge rose on a year-over-year basis for the third
consecutive month: In April the median paid per square foot for resale
single-family (detached) houses was $75, the same as in March and up 17.2
percent from a year earlier. However, the figure remained 56.1 percent below the
$171 peak in June 2006.
The annual gains in various price measures indicate widening price stability
or price pressures in some segments of the market, especially in the more
affordable areas most in demand among first-time buyers and investors. But the
regional median has also been influenced by shifts in the types of homes
selling.
One of the most noticeable changes in the mix of sales this year versus last
year is the decline in foreclosure resales: Last month they represented 50.5
percent of the resale market, compared with 64.9 percent a year earlier. The
peak for foreclosure resales was 66.2 percent in March 2009. In the past,
foreclosed properties tended to sell at a discount and were located in some of
the most affordable areas. Over the past year foreclosure activity that had
mainly stemmed from outrageously risky subprime loans has eased, and lenders
have increasingly steered distressed borrowers into foreclosures alternative
such as short sales and loan modifications. It’s left fewer foreclosures on the
market of late, but that situation could change if lenders decide to push more
of the distress back into the formal foreclosure process.
Another significant change from last year: Today a smaller percentage of
sales occurs below $100,000 – and especially below $50,000. Last month 29.5
percent of homes sold for less than $100,000, compared with 37.9 percent a year
earlier. Last month’s sales below $50,000 represented 6.6 percent of all sales,
compared with 12.5 percent a year ago. Meantime, the portion of sales between
$100,000 and $200,000 has shot up, representing 43.1 percent of sales last month
compared with 37.1 percent a year ago.
The combination of lower prices, low mortgage rates and the allure of the
recently expired federal home buyer tax credit helped drive last month’s home
sales higher than in March and April 2009. (Most buyers who rushed last month to
meet the April 30 federal tax credit deadline to sign a sales contract wouldn’t
close escrow until May or June).
Last month a total of 9,972 new and resale houses and condos closed escrow in
the combined Maricopa-Pinal counties metropolitan area, up 3.6 percent from the
month before and up 10.7 percent from a year earlier.
A rise in sales between March and April is normal for the season, with that
gain averaging 1.9 percent since 1994, when DataQuick’s complete Phoenix-area
statistics begin.
April’s total sales were the highest for that month since April 2006, when
12,669 homes sold. However, last month’s sales total was still 7.7 percent lower
than the average April tally since 1994.
Total resales – existing houses and condos combined – were the highest for an
April since 2005.
Existing (not new) condo sales saw the biggest annual gain last month, rising
68.7 percent from a year ago. In April, condos were 12.0 percent of total sales,
compared with 7.9 percent a year ago.
The number of newly built homes sold in April rose 6.3 percent compared with
March and rose 12.3 percent from a year ago. Still, last month’s new-home sales
were the second-lowest for an April in more than a decade as builders continued
to struggle to compete with low-cost distressed sales.
How the Phoenix-area housing market will shape up over the next year will
depend largely on the strength of the local job market, as well as on the
magnitude and timing of future foreclosures and the market’s response to waning
government stimulus. It’s also possible that later this year or in 2011 the
market will encounter a headwind from rising interest rates, which have been
hovering near historic lows.
Meanwhile, investors and first-time buyers continue to fuel most of the
Phoenix-area sales activity.
In April, 46.9 percent of all Phoenix-area home purchase loans were
government-insured FHA mortgages, a popular choice for first-time buyers,
according to an analysis of public property records. The median price paid for a home purchased with an FHA loan last month was $135,000 – the same as a year earlier.
Absentee buyers purchased 39.4 percent of all homes sold in April – roughly
the same as in March and a year earlier – and paid a median $120,000 last month,
up from $118,000 in March and $102,188 a year ago. Absentee buyers are mainly
investors, but can include second-home buyers and others who indicate at the
time of sale that the property tax bill will go to a different address.
Buyers who appear to have used cash to purchase their homes accounted for
37.2 percent of all April sales, down from 39.1 percent in March. Last month’s
cash buyers paid a median of $112,000, up from $108,600 in March and $81,425 a
year earlier. Specifically, these were transactions where there was no
indication of a purchase loan recorded at the time of sale. Some of these “cash”
buyers could have used alternative financing arrangements outside of a typical,
recorded purchase mortgage, and in some cases these buyers might be taking out
mortgages after their purchases. All-cash deals have become popular in many
Western markets where prices have dropped sharply, luring investor buyers who
don’t always qualify for traditional mortgages. Moreover, sellers favor the
relative speed and certainty of all-cash transactions.
Last month about 3.7 percent of all homes sold had been “flipped,” meaning
they had previously been sold on the open market between three weeks to six
months prior. In March the flipping rate was 3.4 percent, while in April 2009 it
was 1.9 percent.
Meantime, on the foreclosure front: Last month 5,187 house and condo units
were foreclosed on, down 13.6 percent from March but up 47.1 percent from April
2009. For the first four months of this year, 20,754 housing units were lost to
foreclosure, up 15.7 percent from the same period last year.
The foreclosure figures are based on the number of Tustees Deeds filed with
county recorder offices. The document signals that a home was lost to
foreclosure. The foreclosure totals can include units that the county assessor
has designated as condos, but are currently used as apartments (e.g. a 100-unit
complex designated as condos but used as apartments could be foreclosed on and
those units would be reflected in the foreclosure total for that month). For
this reason and others, the number of foreclosure filings has seesawed over the
past year, and a single month’s increase or decline doesn’t necessarily indicate
the beginning of a lasting trend.
Phoenix-Mesa-Scottsdale, AZ MSA
| Number of sales |
Apr-09 |
Apr-10 |
Yr/yr |
| %Chng |
|
Resale houses |
7,440 |
7,805 |
4.90% |
|
Resale condos |
712 |
1201 |
68.70% |
| New
homes |
860 |
966 |
12.30% |
| All
homes |
9,012 |
9,972 |
10.70% |
| |
|
|
|
|
Median sale price |
Apr-09 |
Apr-10 |
Yr/yr |
| %Chng |
|
Resale houses |
$118,000 |
$135,000 |
14.40% |
|
Resale condos |
$115,000 |
$92,000 |
-20.00% |
| New
homes |
$183,426 |
$185,150 |
0.90% |
| All
homes |
$125,000 |
$135,889 |
8.70% |
Media calls: Andrew LePage (916) 456-7157
Copyright 2010 MDA DataQuick Information Systems. All rights reserved.