The latest Realty Studies report from Arizona State University’s W. P. Carey School of Business came out this week. As in my blog post on Tuesday, news is mixed.
The local housing market returned to its historical pattern of good sales activity that usually lasts until August. For June 2010, there were 10,720 recorded sales, which is an improvement over the 9,660 sales of May. However, this is below last year’s 11,820 sales.
Foreclosure activity increased from 33 percent of recorded activity in May to 36 percent in June. However, the very good news is that both the market share and absolute numbers are below March 2010 at 40 percent.
In his previous report, Jay Butler – the author of the study – cautioned that defaults and late payments were still at record levels and could be a precursor to more foreclosures. In addition to the higher foreclosure rate in June, about 40 percent of the Phoenix-area homes resold during the month were sales of previously foreclosed-on properties.
Butler went on to say that housing recoveries usually happen when potential homeowners are motivated by low interest rates and good home prices to buy new homes or “move up” to a better house. Oddly, though mortgage rates are at historic lows and home prices are very reasonable, not as many people as predicted are upgrading their home.
Almost 6,900 homes were resold in the Phoenix area during June, up from more than 6,400, but not as strong as the summer activity last June, which had more than 7,700 resales. The median single-family home price was $143,000 in June, slightly down from $144,000 in May. Prices are significantly higher than last June, when the median was $134,000.
These numbers can be interpreted in different ways. However, the low interest rates and low home prices make the Phoenix real estate market an attractive place for prospective homebuyers. However, if you already are a homeowner and are severely under water, this is an attractive time – right or wrong – for strategic defaulting.
If you are interested in buying or selling you home, contact me. I’m here to help and happy to go over the various options with you.
You can find Butler’s full report, including statistics, charts and a breakdown by different areas of the Valley, here.
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