Phoenix-area foreclosure rate rises for first time this year
For the first time this year, the Phoenix area saw a jump up in the single-family-home foreclosure rate. A new report from the W. P. Carey School of Business at Arizona State University shows 31 percent of the existing-home transactions in the market were foreclosures in August.
This comes after months of lowering the rate, from 43 percent in January and February, all the way down to 29 percent in July. Before this new development, the market had finally dipped below a 30-percent foreclosure rate for the first time since spring 2009. However, timing may be playing a role in the reversal.
“The uptick in foreclosure activity was not entirely unexpected since we’ve seen a pattern of upward movement in this rate in the latter months of a year over the last few years,” says the report’s author, W. P. Carey School of Business professor emeritus Jay Butler. “The weak economy and income growth are probably leading to more people giving up on their homes.”
Almost 2,900 single-family home foreclosures happened in the Phoenix area in August. That’s up from more than 2,500 in July, but still significantly down from almost 4,000 foreclosures last August.
The median price for a single-family home resold in the market in August (not new foreclosures) was $120,000. That’s a drop from $124,900 in July and a bigger fall from $135,000 last August.
“Since the start of the housing decline in late 2007, investors, especially foreign investors, have been the dominant buyers of homes to either fix-and-flip or rent out,” explains Butler. “While the housing market is beginning to produce some positive movement, the surrounding economic environment continues with anemic job and economic growth that’s forestalling consumer confidence and preventing more people from buying homes.”
In the townhouse/condominium sector of the market, foreclosures are also up from 340 in July to 350 in August. However, this is a huge drop from 630 townhome/condo foreclosures last August. The median price of a townhome/condo resold in August was $76,450, down from $80,000 last August.
Butler’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/finance/real-estate/upload/Press-Release-August2011-resale-homes.doc. More analysis is also available from Knowledge@W. P. Carey, the business school’s online resource and newsletter, at http://knowledge.wpcarey.asu.edu.