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The Phoenix Real Estate Market As Of The End Of February 2012 – Boo Yah!

Apr 16

filed under: Market Conditions, Real Estate

The Phoenix market is on fire. Mike Orr, the creator of The Cromford Report  and who now works at ASU analyzed the Phoenix Market as of the end of February 2012 and here is a summary of that analysis, what is it that the guys from The Men’s Warehouse says, “your gonna like what you see, I guarantee it”.

Headlines

  • Overall single family home prices are now higher than 12 months ago
  • The median sales price is up 8.3% from $115,000 to $124,500
  • Average price per square foot is up 4.1% from $81.07 to $84.36
  • Pricing has moved higher since reaching a low point in September 2011
  • Supply is down 42% compared with 12 months ago
  • Monthly foreclosure starts rose in February 2012 but were still down 9% from February 2011
  • Monthly foreclosure completions were down 52% from February 2011
  • There has been a 72% reduction in the number of homes reverting to lenders at trustee sales
  • Over all sales were 9% higher than in February 2011

Single family home sales increased for:

  • New homes up 26%
  • Normal re-sales up 63%
  • Investor flips up 71%
  • Short sales and pre-foreclosures up 34%
  • HUD sales up 9%
  • Third party purchase at trustee sales up 15%

Single family home sales reduced for:

  • Bank owned homes down 40%
  • GSE (Fannie Mae, Freddie Mac, etc.) owned homes down 58%

Foreclosure Starts

We had a big month for foreclosure starts in February 2012, with a jump of 32% from January 2012 to 4,907. This was due primarily to a large batch of notices issued by two of the larger banks. However, new notices of trustee sales were still down 9% compared with February 2011 for single family, townhomes and condos combined.

Our worst month ever for new notices was March 2009 with 11,354 and we are still down 57% from that peak level.  The breakdown by county was 4,397 for Maricopa County and 510 for Pinal County.

For comparison with “normal” levels of foreclosure notices, in 2002 we averaged 1,160 foreclosure notices for Maricopa County. Since the population has grown about 20% since 2002, we would consider 1,400 foreclosure notices per month a normal level for Maricopa County, so we were still slightly more than three times the normal level in February.

A normal level for Pinal County is harder to estimate because the population in Pinal County has more than doubled in the last 10 years.

Foreclosure Completions

We can see a dramatic change in foreclosure results when we compare February 2012 with February 2011.

  • The number of completed trustee deeds is down by 52%
  • The number of homes reverting to lenders is down by 72%
  • The number of homes purchased by third parties at the auction is up by 18%

So the supply of REO’s (foreclosures) has been dramatically reduced while the number of homes being purchased by third parties at auction is at unprecedentedly high levels for the time of year. In February 2012 18% more homes were being purchased at the auction than were going back to the lenders and we continue to see the growth in the third party share increasing over the coming months. This time last year there were 3.5 homes going back to the lender for each one purchased by a third party.

Written by Howard Harris