Thursday, July 14, 2011

Phoenix-area foreclosures are down again

There was more good news for the hard-hit Phoenix-area housing market in June, according to a report from Arizona State University issued Tuesday: The rate of foreclosures continued to drop for the fourth consecutive month.

However, the report's author cautioned that he has seen the same seasonal pattern recur for the past two years without any significant recovery in the home-resale market overall.

Foreclosures represented 31 percent of the existing-home transactions in the Phoenix-area market in June, according to ASU, down from 35 percent in May, 36 percent in April, 38 percent in March, and 43 percent in January and February.

"It's following a pattern not that much different than last year or the year before," said report author Jay Butler, professor emeritus at the W.P Carey School of Business.

He said economic fundamentals such as the employment rate and average wage remain weak.

"Investors like the low prices now because they know they can sell in several years for a profit," he said.

"But most people buy a home because they have confidence in their future, in their jobs, in their families.

"Until the economy really starts to recover, that confidence is lacking."

The Phoenix-area housing market had 3,280 single-family home foreclosures in June, according to the report, down from 3,505 foreclosures in May and from 3,835 in June 2010.

The median price for a single-family home resold in the Valley market in June was $126,500, it said, up from $125,000 in May but still down significantly from $143,000 the previous June.

Home-resale transactions increased in June to 7,195 from 6,885 in June 2010, the report said

"Deep down in my intestines, my thinking is that we are on the way out of this," Butler said about the housing slump, provided that there is no more serious bad news about the housing market.

For example, a sudden jump in homes listed for sale on the market could cause another decline in prices, he said.

"Even though the number of foreclosure pre-filings has been declining for the last year, foreclosures continue to be the dominant force in the market," he said.

"Recovery is moving at a glacial pace."

In the townhouse and condominium market, there were 405 foreclosures in June, the report said, compared with 480 foreclosures in May and 585 foreclosures in June 2010.

The median resale price for a townhome or condo in June was $75,950, down significantly from $94,600 the previous June.

by J. Craig Anderson The Arizona Republic Jul. 13, 2011 12:00 AM

Phoenix-area foreclosures are down again

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