The number of Valley homes sold in July tumbled because of a continuing lack of inventory – and an increasingly frustrating shortage of affordable housing.
The slowdown has resulted in this year’s home sales falling behind the pace of 2011 activity. Sales dropped nearly 22 percent in July from the previous month, to 7,148. While sales normally drop in the summer, activity was down about 15 percent below July 2011, according to the Arizona Regional Multiple Listing Service.
Sales are considered robust despite the change, said Chris Heagerty, ARMLS director.
She acknowledged the frustration home buyers face but said the pain is necessary for the housing market after it crashed.
“If you look at it in a historical perspective, the prices just fell so drastically that any kind of recovery is going to have to have some pressure that doesn’t feel good,” Heagerty said. “And I think that’s what we’re experiencing now.”
That shortage helped push prices up, but not to the extent since values began rising last fall.
Median list prices rose 3.2 percent to $146,000, and average prices rose 1.2 percent to $197,000. The incresase is in part because the market is no longer flooded with low-end housing that dragged down average sale prices. The shrinking supply of cheaper housing drove buyers to higher price ranges in the second quarter of 2012, with sales of homes $250,000 to $350,000 up 50 percent from the first quarter.
ARMLS predicts sale prices will fall in the next month slightly as part of a normal slowdown in activity this time of year. But Heagerty said the unusual nature of the recovery makes it difficult to determine if the tight supply of homes will keep driving prices up significantly.
“We really haven’t had normalcy for a long time . . . so it’s hard to predict at this time,” she said.
Other items in the ARMLS July housing sales report:
• The average number of days on the market dropped two days, to 73. The high point was 138 days in February 2008.
• The number of distressed sales continues to slide, to 2,112 short sales and 1.041 foreclosures. ARMLS credits the improvement in part to government assistance programs and banks that are more willing to work with owners.
• The number of foreclosures pending was 16,578, down 67 percent from a high of 50,568 in November 2009. The normal range is 4,000 to 6,000.
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