Several pieces of good news are trickling into the hard-hit Phoenix-area housing market. A new report from the W. P. Carey School of Business at Arizona State University shows positive trends for struggling homeowners, as of January:
- Single-family home prices are moving higher.
- Fewer foreclosures are coming into the pipeline.
- The glut of underpriced homes on the market has ended, with a more balanced market now for houses under $300,000.
Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business, says things are shifting for the better in Maricopa and Pinal counties. He says the median price for all sales, including new-home sales, in the market was $120,500 in January 2012. That’s an increase from $113,166 (up about 6.5 percent) from January 2011. Realtors will note that the average price per-square-foot for single-family homes increased 3 percent from January 2011.
“Single-family home prices overall in the Phoenix area have been moving up since they reached a low point in September,” says Orr, the report’s author. “Also, looking forward, I expect a declining trend in foreclosures.”
A total of about 2,450 single-family home foreclosures happened in Maricopa and Pinal counties in January 2012. That’s significantly down from almost 4,200 in January 2011. The number of foreclosure starts – homeowners receiving notice that their lenders may foreclose in 90 days — is also down 49 percent from last January.
Orr also believes there is no longer an oversupply of homes for sale in the price range below $300,000. He says investors have bought up and eliminated the excess inventory. However, ample supply remains in the upper price ranges, which were less affected by foreclosures.
“Many people think there’s a glut of homes the banks are hiding somewhere, and that may be the case in other markets, but not here in the Phoenix area,” Orr says. “We’ve gone through so many foreclosures that the system has been working itself out for about five years. Everything is cyclical in housing. The market doesn’t go down forever, and it doesn’t stay up forever.”
Orr says the supply of homes listed for sale went down 42 percent from January 2011 to January 2012. As the supply dwindles, prices are likely to rise. Orr adds fewer homes are reverting back to the banks at auction, as investors snap up what bargains are left in the Phoenix area.
“Buyers from Canada, New Zealand and Australia, in particular, are taking advantage of the exchange rates to purchase investment and vacation homes,” Orr explains.
The market saw about 8,000 new- and existing-home sales in January 2012, up from fewer than 7,500 last January. The peak buying season normally starts in February, so more activity is expected.