Phoenix Housing Market Shows Strong Rebound
Phoenix Business Journal by Jan Buchholz – Tuesday, March 27, 2012
Two reports, one national and one local, suggest a healthy rebound in the Phoenix housing market.
According to a report authored by Michael Orr at the W.P. Carey School of Business at Arizona State University, Phoenix-area housing supply is down 42 percent from a year ago, foreclosures are down 52 percent from February 2011 and single family home prices have been trending upward since September 2011.
CoreLogic, meanwhile, also shows a local drop in foreclosures, so much so that the Phoenix foreclosure market is tracking below the national foreclosure rate of 3.43 percent of outstanding mortgages. That number locally in January was 2.85 percent of outstanding mortgages, a decrease of 1.93 percentage points compared with a year earlier. The 90-day delinquency rate was 7.35 percent in Phoenix as compared with 10.07 percent in January 2011.
The declining inventory numbers may be the biggest surprise.
“Supply is tight in a pretty extreme way, and it looks likely to stay that way for months,” said Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey school.
Including new home sales, median prices for single family homes were up from $115,000 in February 2011 to $124,500 in February 2012, or 8.3 percent.
During the current buying season, which runs through June, Orr expects “frantic attempts” to buy homes by multiple buyers.
“One thing that could slow this down is appraisals,” Orr said. “That’s because appraisers are still looking at prices from up to three months ago, and they may be reluctant to write appraisals that match the now-higher market value.” As a result, cash buyers will be in the driver’s seat.
Foreclosure sales remain a significant percentage of sales in the market, however, at about 20 percent. New home sales only account for 6 percent of all sales, Orr said.