REALTY STUDIES

November 2011

RESALE HOME MARKET

Historically, the local resale home market slows down over the later months of a year. It did decrease from 7,215 sales for October 2011 to 7,105 sales in November 2011, but was ahead of last year’s 6,845 recorded sales. In comparison to October 2011, foreclosure activity increased from 1,900 transactions or 26 percent of the recorded resale activity to 2,075 transaction or 29 percent of the recorded sales activity. It was 43 percent in January 2011, while it was 29 percent (2,295 transactions) in September 2011 and 31 percent (2,095 transactions) for a year ago. The traditional sector including short-sales, REO transactions, other market transactions, had 5,035 recordings, while it was 5,315 sales in October and 4,750 sales for a year ago. Even with a slowdown in foreclosure activity, the overall housing market is not strong enough to make-up the decline in activity with traditional sales.

While the local housing market is beginning to produce some positive movement, the surrounding economic environment continues with anemic job and economic growth that is forestalling consumer confidence. Further, on-going discussions about even stricter guidelines, changes in the secondary market and possible further lowering of various mortgage limits could act as impediments to the recovery of the owner-occupant as the dominate force in the housing market.

Foreclosure activity, as percentage of the total resale market in November 2011, varied throughout the Valley such as 32 percent in El Mirage, 37 percent in Glendale, 30 percent in Gilbert and 16 percent in Scottsdale. Another component of the market was the sale of previously foreclosed property, which has accounted for approximately 40 percent of the traditional transactions in November (2,010 sales). This percentage also varies throughout the county from 63 percent in Avondale to 40 percent in Chandler to 18 percent in North Scottsdale. Thus, foreclosure–related activity represented 57 percent of the recorded activity for the month.

Since the start of the housing decline in late 2007, investors, especially foreign investors, have been the dominant buyers of homes to either fix & flip or rent out. However, the absence of a strong move-up owner-occupant market, which is fundamental to a housing recovery, will also limit any growth in home prices. While lower prices can greatly stimulate investment activity, they can adversely impact many owners and potential sellers whom are watching their limited equity erode, as prices decline to and even below existing debt level. Over the last several months, the median price of foreclosed homes has been declining, while traditional transactions have been increasing. The median price for the traditional market increased from $125,000 in October to $130,000, while it was $134,000 for a year ago. As investors pursued the deal, foreclosed properties fell from last year $138,000 to $117,000 in November 2011.

Housing prices are being influenced by foreclosure-related activity. One of the reasons that the foreclosed median price fell was that only two homes over $1 million were foreclosed in November. Another influence is that, for the last year, approximately 40 percent of the traditional sales were foreclosed homes that were sold again with a median price markdown of 14 percent from the foreclosed price. Although the markdown has improved from 25 percent a year ago, it does vary throughout the Valley ranging from 41 percent in Maryvale to 21 percent in Glendale to 8 percent in the Gilbert area.

Since the Greater Phoenix area is so large, the median price can range significantly. For November 2011 in North Scottsdale, the median price for a foreclosed property was $285,845 ($398,145 in October) while the traditional market was $455,000 ($419,000 in October). In South Scottsdale the splits were $174,440 ($225,730 in October) and $172,925 ($169,900 in October), respectively.

In Maryvale, traditional transactions were $51,000 ($47,770 in October) and foreclosures were $47,950 ($47,000 in October), while in Union Hills it was $163,750 ($156,850 in October) and $166,700 ($141,670 in October), respectively. For November 2011, Paradise Valley had a median square footage of 4,060 sq.ft. and a median price of $1,000,000.

Within the 1,075 total recorded sales for November 2011, the townhouse/condominium market had 260 foreclosed properties. For a year ago, there were 1,025 total transactions with 300 being foreclosures. In November 2011, the median price for foreclosed properties was $80,500 while the traditional market stood at $80,900. Last year, the splits were $99,835 and $75,000 respectively.

The median square footage for a single-family home recorded as foreclosed in November 2011 was 1,715 square feet (1,660 for a year ago), while it was 1,805 square feet (1,795 for a year ago) for a market transaction home. In the townhouse/condominium sector, the median square footage for a foreclosed unit was 1,100 square feet (1,045 for a year ago), while the traditional market units was 1,165 square feet (1,145 for a year ago).

November 2010 SINGLE-FAMILY RESALE HOMES / November 2010 CONDOMINIUM/TOWNHOUSE RESALES
Total / Median / Traditional / Median / Foreclose / Median / Total / Median / Traditional / Median / Foreclose / Median
Price / Sales / Price / Sales / Price / Price / Sales / Price / Sales / Price
Selected
Cities
Phoenix / 1,900 / 89,900 / 1,245 / 82,750 / 655 / 110,225 / 395 / 65,000 / 270 / 59,615 / 125 / 83,680
Scottsdale / 410 / 340,000 / 325 / 355,000 / 85 / 284,260 / 220 / 127,200 / 180 / 122,300 / 40 / 153,315
Chandler / 405 / 172,200 / 280 / 172,600 / 125 / 170,750 / 35 / 75,450 / 25 / 65,000 / 10 / 93,375
Gilbert / 475 / 179,290 / 340 / 182,000 / 135 / 175,630 / 20 / 109,000 / 15 / 106,250 / 5 / 116,615
Mesa / 680 / 120,000 / 470 / 118,250 / 210 / 129,890 / 100 / 65,000 / 65 / 58,600 / 35 / 82,490
Tempe / 125 / 164,000 / 90 / 165,010 / 35 / 131,720 / 45 / 107,500 / 30 / 104,000 / 15 / 144,050
Avondale / 185 / 100,210 / 105 / 98,750 / 80 / 104,005
El Mirage / 95 / 73,220 / 55 / 72,900 / 40 / 73,535
Glendale / 500 / 109,900 / 320 / 98,000 / 180 / 134,320 / 40 / 57,500 / 25 / 37,950 / 15 / 87,640
Goodyear / 185 / 144,000 / 135 / 145,000 / 50 / 141,900
Peoria / 350 / 154,000 / 240 / 154,000 / 110 / 155,145 / 20 / 58,450 / 15 / 61,900 / 5 / 45,000
Sun City / 90 / 113,750 / 75 / 111,800 / 15 / 139,500 / 35 / 62,500 / 30 / 64,500 / 5 / 54,000
Sun City West / 55 / 160,000 / 50 / 145,000 / 5 / 214,060 / 10 / 101,250 / 10 / 101,250
Surprise / 355 / 127,500 / 260 / 130,000 / 95 / 121,590 / 10 / 93,000 / 10 / 93,000
County / 6,845 / 135,000 / 4,750 / 134,000 / 2,095 / 138,000 / 1,025 / 81,000 / 725 / 75,000 / 300 / 99,835
October 2011 SINGLE-FAMILY RESALE HOMES / October 2011 CONDOMINIUM/TOWNHOUSE RESALES
Total / Median / Traditional / Median / Foreclose / Median / Total / Median / Traditional / Median / Foreclose / Median
Price / Sales / Price / Sales / Price / Price / Sales / Price / Sales / Price
Selected
Cities
Phoenix / 2,105 / 82,000 / 1,500 / 83,000 / 605 / 80,500 / 390 / 67,350 / 280 / 66,000 / 110 / 69,600
Scottsdale / 475 / 336,000 / 385 / 336,500 / 90 / 330,920 / 195 / 125,000 / 155 / 126,000 / 40 / 109,500
Chandler / 410 / 160,050 / 295 / 170,000 / 115 / 146,565 / 40 / 67,950 / 30 / 67,000 / 10 / 70,000
Gilbert / 435 / 157,000 / 335 / 153,000 / 100 / 172,040 / 25 / 83,900 / 20 / 86,000 / 5 / 79,000
Mesa / 735 / 116,000 / 540 / 119,500 / 195 / 107,580 / 105 / 62,000 / 65 / 63,600 / 40 / 59,850
Tempe / 145 / 140,000 / 115 / 137,500 / 30 / 157,500 / 40 / 77,450 / 30 / 75,000 / 10 / 85,850
Avondale / 155 / 103,000 / 115 / 100,000 / 40 / 113,500
El Mirage / 100 / 68,240 / 65 / 66,100 / 35 / 76,700
Glendale / 555 / 99,800 / 380 / 99,900 / 175 / 98,150 / 50 / 42,950 / 35 / 40,325 / 15 / 93,010
Goodyear / 165 / 140,000 / 115 / 137,500 / 50 / 141,230
Peoria / 355 / 135,000 / 260 / 135,000 / 95 / 138,250 / 25 / 58,000 / 15 / 86,000 / 10 / 42,250
Sun City / 85 / 110,000 / 75 / 107,950 / 10 / 132,820 / 55 / 59,500 / 50 / 59,000 / 5 / 89,515
Sun City West / 70 / 141,950 / 60 / 141,950 / 10 / 137,935 / 10 / 99,900 / 10 / 99,900
Surprise / 385 / 122,000 / 300 / 120,000 / 85 / 129,600
County / 7,215 / 124,900 / 5,315 / 125,000 / 1,900 / 121,500 / 1,025 / 77,300 / 760 / 79,125 / 265 / 74,000
November 2011 SINGLE-FAMILY RESALE HOMES / November 2011 CONDOMINIUM/TOWNHOUSE RESALES
Total / Median / Traditional / Median / Foreclose / Median / Total / Median / Traditional / Median / Foreclose / Median
Price / Sales / Price / Sales / Price / Price / Sales / Price / Sales / Price
Selected
Cities
Phoenix / 2,035 / 84,000 / 1,375 / 85,000 / 660 / 81,000 / 380 / 65,625 / 275 / 62,000 / 105 / 82,105
Scottsdale / 395 / 345,000 / 330 / 363,500 / 65 / 266,000 / 250 / 125,000 / 205 / 133,500 / 45 / 98,450
Chandler / 430 / 160,250 / 310 / 163,690 / 120 / 155,740 / 35 / 60,000 / 25 / 60,010 / 10 / 56,000
Gilbert / 440 / 170,175 / 310 / 170,000 / 130 / 177,315 / 20 / 92,015 / 15 / 83,515 / 5 / 172,135
Mesa / 750 / 114,000 / 550 / 115,000 / 200 / 109,295 / 110 / 50,000 / 85 / 52,000 / 25 / 45,275
Tempe / 130 / 150,000 / 90 / 154,250 / 40 / 126,700 / 45 / 94,400 / 30 / 127,000 / 15 / 70,855
Avondale / 170 / 95,200 / 115 / 95,940 / 55 / 93,000
El Mirage / 95 / 66,500 / 65 / 65,800 / 30 / 67,000
Glendale / 505 / 99,900 / 320 / 103,000 / 185 / 95,110 / 40 / 61,850 / 25 / 46,000 / 15 / 80,315
Goodyear / 185 / 140,250 / 135 / 142,000 / 50 / 136,140
Peoria / 380 / 140,760 / 275 / 143,000 / 105 / 118,450 / 25 / 92,000 / 20 / 90,950 / 5 / 100,775
Sun City / 90 / 104,000 / 70 / 104,000 / 20 / 102,500 / 65 / 58,050 / 50 / 59,500 / 15 / 53,100
Sun City West / 60 / 151,500 / 60 / 159,950 / 15 / 112,000 / 10 / 110,840 / 5 / 165,240
Surprise / 350 / 120,000 / 245 / 120,000 / 105 / 117,000
County / 7,105 / 126,000 / 5,030 / 130,000 / 2,075 / 117,000 / 1,075 / 80,825 / 815 / 80,900 / 260 / 80,500