Wednesday, September 16, 2009

Valley resales, foreclosures down

Valley resales, foreclosures down
Numbers dropped from July to August, ASU figures show
by J. Craig Anderson - Sept. 15, 2009 12:00 AM
The Arizona Republic

The Phoenix-area housing market downshifted in August, with both home resales and foreclosures decreasing considerably compared with the previous month, according to a report from Arizona State University. Sales of existing single-family homes dipped to 5,995 in August from 7,300 in July.

Foreclosures also decreased to 3,085 from 4,200 the previous month. Still, August home resales were up from the 4,210 transactions recorded in August 2008.Foreclosure activity decreased by more than 200 from a year earlier, when there were 3,295 foreclosures recorded.

As expected, the median sale price for existing single-family homes was down significantly, about 29 percent, from a year earlier. The median price was $138,000, compared with $194,000 in August 2008. ASU realty studies Director Jay Butler said the year-over-year numbers indicate movement in the right direction.

However, with one foreclosure happening for every two home resales, Butler said, it's too early to say how significant those changes are. "A recovery cannot really be established until foreclosure activity drops to historical levels, which would be about one foreclosure for every 20 regular home sales," he said.

Butler added that real-estate investment is still the driving force propelling the housing market forward. That needs to change, too, before the housing market returns to anything resembling normal activity.

"The fundamental question is whether sales will stay strong, driven by the foreclosure-related market, or start to move down, which is traditional for the end of the year," he said. "If the latter occurs, it could represent a preliminary signal that the market is returning to normalcy."