Saturday, March 12, 2011

Phoenix-area foreclosures still dominate home resales, study says

The Phoenix-area housing market remains incapable of moving on from a devastating crash in home values that began about five years ago, according to new home-resale data from Arizona State University.

Jay Butler, an associate professor of real estate, was author of the report on home-resale activity, released Wednesday. The report said the long delay in market recovery was a two-pronged monster. The first issue relates to unresolved problems from the housing market's past. The second concerns more recent economic challenges, such as job losses and relatively stagnant population growth.

Among the 8,565 single-family home-resale transactions in February, 3,650 were foreclosures, Butler's report said.

Of the 4,915 non-foreclosure transactions, 40 percent of those were resales of recently foreclosed-on homes.

Foreclosure-related activity represented about two-thirds of the market transactions in February, said Butler, of ASU's W.P. Carey School of Business.

Overall, resale-related activity was up slightly from a year earlier, the report said, with 7,925 transactions overall, including 3,305 foreclosures and 4,620 home resales.

The median price for single-family homes resold in Maricopa County in February was $127,500, a boost from the January median resale price of $125,000 but down from last February's $140,000 median.

Butler also tracks the townhouse and condominium market, which experienced 580 foreclosures in February, up from 500 foreclosures a year earlier.

There were 880 townhome and condo resales, compared with 800 in February 2010; the median resale price was $75,000 - a considerable drop from the February 2010 median price of $95,000.

In the final months of 2010, foreclosures in the single-family home-resale market had come to represent only 30 percent of all transactions, Butler said, offering a ray of hope that foreclosure activity may be tapering off.

But in January that rate shot up to 4 percent, and Wednesday's report showed little change in February.

"We've all been watching to see if the foreclosure rate in late 2010 would carry over into this year, but unfortunately, the good news hasn't come yet," Butler said.

He added that 2010 ended under an unusual set of circumstances, including temporary foreclosure moratoriums, legal challenges to the foreclosure process, and weak economic and job recovery.

"The fundamental uncertainty now is whether the initial months of 2011 represent just a short-term response as the pipeline unclogs after the foreclosure moratoriums, or if it's a continuation of a market being dominated by foreclosures," Butler said.

by J. Craig Anderson The Arizona Republic Mar. 10, 2011 12:00 AM

Phoenix-area foreclosures still dominate home resales, study says

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