The median price of existing homes across the Valley dropped by $76,100 last month compared to November 2007, according to the latest report from Arizona State University’s Realty Studies Department.
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The overall median price last month was $159,900, compared to $167,375 in October and $236,000 in November 2007, the study said. That’s a 32 percent drop in the median home value in the past year.
The median price for traditional transactions was $162,000, while the median price for foreclosure transactions was $155,100. A year ago, those prices were $249,000 and $212,000.
Foreclosed transactions represented homeowners losing their property to individual bidders or the lender of record, while traditional transactions were sales of both owner-occupied and homes that have emerged from foreclosure proceedings.
“Of the total recorded activity in the resale market, 48 percent represent homes that are being taken from the owner-occupant or owner and put into banks or investors,” said Jay Butler, realty studies director. “In most areas, they dominate the market, they set the price and they set the tenor of what’s happening in an area. Historically, what is now (48 percent) of resale activity was 3 percent a year ago.”
Some 6,465 existing home sales were recorded last month in the Valley, including 3,095 foreclosure transactions and 3,370 traditional transactions. In October, the 8,210 resales included 3,745 foreclosure transactions and 4,465 traditional transactions.
Existing home sales in November were way up from the 3,695 recorded for the same month in 2007 because of lower prices spurred by the foreclosure activity.
“If you live in an area where you have heavy foreclosure activity going on, it’s going to be difficult to traditionally sell your home ... and you see these homes being vandalized, they’re empty and it’s sort of a depressing scene to look at,” Butler said.
With one in every 198 housing units receiving a foreclosure filing, Arizona posted the nation’s third highest foreclosure rate in November, behind Nevada and Florida, despite a nearly 25 percent decrease in filings from the previous month, according to RealtyTrac, an online marketplace for foreclosure properties. Foreclosure filings include default notices, auction sale notices and bank repossessions.
Foreclosure filings were reported on 13,136 Arizona properties during the month, up nearly 128 percent from November 2007. As for the resale market, most of the foreclosure homes that are selling are going to investors, Butler said.
“With these low prices, (these investors) can economically rent the home, so you get somebody looking after the home and making sure it’s not vandalized, it’s being fixed up and hopefully getting people to live in it,” he said. “Maybe you want owner-occupants (buying foreclosures), but at the moment you’re not getting that. But at least you have somebody there who’s going to keep that home up, and if you get enough it begins to improve the neighborhood.”
Butler expects widespread job losses to lead to another increase in foreclosure activity in the coming months.