Phoenix Real Estate Foreclosure Listings - April 2010

Phoenix foreclosures remained relatively constant for yet another month. The drop in the total number of listings was only 587 listings from March 1st to April 1st in Phoenix. Foreclosures (bank owned or REO properties and short sales) dropped 345 listings. The big news expects to be the total number of homes sold for March 2010. Home sales may reach the 9,000 mark, making March the largest residential sales month since last July.

Read the chart this way:
"Residential listings in The Phoenix area totaled 34,461 to begin April 2010, a drop of 587 from March. 14,087 of those listings are foreclosure listings in Phoenix. Foreclosures make up 40.9% of the total listings.

Talk of "shadow inventory" still looms on blogs and in the news.

The second chart shows the breakdown between the normal listings and the foreclosure listings in the Phoenix area. Read the chart this way:
"20,374 listings are "normal listings that have been on the market for an average of 172 days. 14,087 listings are foreclosure listings that have been on the market an average of 102 days."

Short sales have dragged that number higher as bank owned homes slip off the market much sooner than short sales in Metro Phoenix. Real estate with short sales continues to be an adventure.

Short Sale Roulette

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Phoenix Real Estate -Short Sales or Roulette

I constantly get buyer clients asking me about the pros and cons of short sales. In fact, I've received so many questions I created a short sale page on my website and I refer clients to that page. I'm sure I'm not the only realtor who has done that in this market.

I'll tell you that I've had my share of successful short sales, both on the selling and buying side. I've also had my share of short sales that have blown up because 1.) a HELOC demanded a promissory note and the seller refused to sign it OR 2.) a bank wouldn't let go of an unreasonably high BPO. [Side note: If the realtor who did the BPO for my short sale on Desert Cove Rd in Glendale is reading this -- your BPO WAS too high and the house sold for $10,000 less as a REO] Since I have a fairly analytical mind (which can be a curse in a marriage) I decided to see if I could figure out the statistical probabilities of a short sale closing escrow.

My bachelor's degree is in business administration and I did well in quantitative analysis. However, I did not want to create a thesis. I was just seeking a simple way to convey the success rate of short sales to my clients. Here's what I came up with: divide the number of closed short sales in one month by the combined total of the closed short sales plus the canceled short sales. Expressed mathematically:

closed short sales / (closed short sales + cancelled short sales) = % of success

I used only canceled short sales and not those that "expired" or were "temporarily off market." I reasoned that expired short sales could simply be re-listed, were generally caused because the listing realtor lost track of time, and that most of them received an extension. I did not count those that were "temporarily off market" because they would probably end up as either closed or canceled.

Here's my conclusion based on 12 months of statistics from the Arizona Regional Multiple Listing Service: There is a slightly better chance closing a short sale than winning at a roulette table. Remember that roulette has a 50% chance of winning if you play either "odd/even" or "red/black."

The 12 month chart shown below illustrates that an average of 53.7% of short sales close. Read the chart in this manner: "4,150 foreclosures sales (bank owned and short sales combined) occurred in February 2010. 1,438 of those sales were short sales. 1,167 short sales were canceled in February 2010. Therefore, 55.2% of short sales were successfully closed in February 2010." You will also note that the success of short sales has been greater in the last six months than in the first six months of the period.

I can already hear all of the short sale experts across America claiming a much higher success rate. I have a higher success rate too. However, I present these numbers for your information or your humor -- whichever you prefer. Actually, I kind of like the roulette analogy and have already used it twice today. Next time a client asks you if they should consider buying short sales say to them "red or black?"

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Home Buyers, Mortgage, Inspectors, Credit

Phoenix Foreclosures - March 2010

Phoenix Foreclosures

Phoenix Foreclosures -- sales up in February 2010.

February had only had 28 days but residential sales were up 10% for short sales and bank owned homes and 14% overall in Metro Phoenix. Foreclosures continue to dominate in Metro Phoenix. Real estate residential sales increased from 5,812 in January to 6,613 home sales in February 2010. The reason continues to be last minute shopping for the tax credit fueled by low interest rates. This trend should continue throughout the next few months.

Read the chart in this manner: 6,613 homes sold in February in Metro Phoenix . Real estate defined as "normal" sales (not bank owned property or short sales) accounted for 2,463 sales, or 37.2% of the total. 4,150 sales were foreclosure related which comprised 62.8% of the total.

Year over year sales, commonly known as YOY (a common industry comparison standard), have been up for 21 consecutive months (not completely shown by the chart ). YOY essentially compares the sales in February 2010 to the sales in February 2009, the sales in January 2010 to the sales in January 2009, and so on. In other words, Phoenix real estate sales have consistently been improved from the previous year.

Phoenix foreclosures (bank owned or REO property and shorts sales) officially accounted for over 1/2 all sales in the Phoenix real estate market beginning in October 2008. They have surged as high as 75.9% but have yet to drop below the 50% mark. I have statistics that go back to June 2007. Contact me for more information.

My next post will evaluate the number of Phoenix foreclosure sales and their makeup in terms of how many were lender owned properties and how many were short sales.

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Homeowner Rights, Foreclosure Eviction Laws, and Forcible Detainers

Phoenix Foreclosures, Eviction Laws, Homeowner Rights

A Forcible Entry and Detainer is an action that a new property owner (the foreclosing bank) can take if the existing occupant refuses to leave after appropriate notice (90 day notice of Trustee Sale)in Metro Phoenix. Foreclosure occupants could be either a tenant or original owner of property that was sold at a Phoenix foreclosure or trustee's sale. Foreclosure eviction laws are subject to change, but this article is current In Arizona as of March 2010. This article was prepared with the help of a good friend, Georgi Stratton. Her contact info is on the bottom of the post.

The tenant/occupant receives a written demand to vacate the property. The term of the period to vacate is dictated by the type of occupancy - whether commercial or residential and whether a tenant or an owner that was foreclosed on. This term normally is either 5 or 7 days, unless the contract states otherwise. After the 5-7 days expire and the tenant/occupant still refuse to leave then a complaint for a forcible detainer action can be filed. The statutes provide for a very short notice period before a court hearing.

The sole issue at the court hearing is whether or not the tenant/occupant has the right to possession. If they do not then they will be found guilty of a forcible entry and detainer. The court will enter an order directing the tenant/occupant to vacate within 5 judicial days. After that period has expired the Sheriff's office can then evict the tenants/occupants, remove their personal property and give the rightful owner possession and control of the property.

It would be wise for the rightful owner to change the locks and take steps to protect the property.

Typically the seller must vacate the home within 7 to 14 days after a Trustee Sale (auction). Often the bank will offer the homeowner a $1,000 - $2,000 relocation fee if the homeowner moves within several days and leaves the home is good condition. If a foreclosed homeowner in the Phoenix area is being forced out without a moving fee or several days to move, the homeowner has rights. Inform the lender's representative that you request a moving fee or are requiring them to file a Forcible Entry and Detainer Action. If they refuse to comply with either of these or if you feel your rights are being infringed upon, contact the local Sheriff for enforcement of current metropolitan Phoenix foreclosure eviction laws.

If the lender has to file a Forcible Entry and Detainer Action, you will not be able to get any cash for moving expenses.

Georgi Stratton ,Paralegal - Director of Short Sales,  Winsor & Coleman, PLC Direct: 480.695.6565 Fax: 480.699.8853 Email: georgistratton@yahoo.com

Phoenix Foreclosures 41% of Active Market

Phoenix Real Estate

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Phoenix Foreclosures Still Dominate March 2010 Market

Metro Phoenix foreclosures still 41% of active market

The number of active listings and number of Metro Phoenix foreclosures remained virtually unchanged from February to March of 2010. As seen in the chart, listings hit a several year low in September 2009.  They have been gradually increasing since that time.  The chart also indicates how far active listings have dropped since 2008, thereby accounting for the swing in the market from a complete buyer's market to a market that has evened out.  In some locations around the Valley the market is even closer to being a seller's market because of extreme competition for low priced Metro Phoenix foreclosures.

 

Phoenix Real Estate

A 10-year look at the Phoenix Real Estate market - Foreclosures Impact

Phoenix Foreclosures

I usually break down the Phoenix Foreclosure market on a micro level. But, and as Monty Python used to say, "and now for something entirely different," here's a look at the larger macro picture.

I was curious just how far prices dropped since the boom years. So I went tothe multiple listing service, came up with some criteria, clicked a few buttons, and wallah: a 10-year look at the average price and price per square foot in the Phoenix real estate market. As you can guess, they have been impacted by metro Phoenix foreclosures. This is my disclaimer: this information came directly from the Arizona Regional MLS. Any realtor and can get the same information. I'm not responsible for any errorsss in the data. OK, now that that's over with, let's get back to this post.

Read that chart in this manner: in 2009 there were 92,146 residential sales in the Phoenix area. That total sales volume equaled $15,668,606,573, or an average price of $170,045. Since the average sold home was 1,930 square feet, the average price per square foot in the Phoenix housing market for 2009 was $88.00

Phoenix Foreclosures

Anyone who follows Phoenix real estate will realize the rest of the chart isn't hot breaking news because this information was available on an intuitive basis. In other words, we all knew that house values started an amazing increase in 2004 - 2005 and that many people bathed in the "afterglow" during 2006. But seeing these numbers all in one place -- and in black and white and blue-- is a minorshock to the system. Who doesn't wish they has access to this chart 4-years ago? However, then the crisis with foreclosures hit Phoenixand home values decreased to their current state.

You can see a $94.00 drop in the price per square foot from 2006 to 2009. Obviously, that is due to the fact that approximately 55% of all homes sold in 2008 - 2009 were Phoenix foreclosures. More specifically,bank owned homes and short sales. That quantity of metro Phoenix foreclosures is enough to suck the life out of values in any housing market (and we won't name other housing markets in this post -- you know which ones I'm talking about ).

When people ask me "is this the time to buy real estate" I can now honestly say prices are lower than they have been in the last 10 years.

Phoenix Foreclosures

Housing Tracker Phoenix

Phoenix foreclosures - December 2009

December 2009 Housing - Phoenix Foreclosures

Here is another in a series of reports for Phoenix Foreclosures. Results for December 2009 indicated an increase in the number of homes that sold for under $100,000. December 2009 is the first month in which there was any significant increase in this statistical category.

Looking at the total number of homes that sold for under $100,000 is one way to look at Metro Phoenix Foreclosure sales. Market information is revealed in the following chart and is read in this manner: "There were 7,670 homes sold in metropolitan Phoenix during the month of December 2009. 2,811 (or 36.6%) of all these sales were under $100,000. 2,249 of those homes (80% of the total) were Metro Phoenix foreclosure sales."I define Phoenix foreclosures as both bank owned homes and short sales.

As indicated by the color yellow, this number had been on a decline since a peak of 3,866 homes in May 2009. At that time 90% of all homes that sold for under $100,000 were foreclosure-type sales in the Phoenix area(indicated in orange).

A primary reason for the June through November decline has been the gradual increase of home prices in the Phoenix area. Our Phoenix market tracker has indicated the increase began in April 2009 when the average price in the entire metropolitan area was approximately $84.00 per square foot. Price per square foot in December 2009 was approximately $91.00.

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Phoenix housing market

DMOZ Directory

Phoenix real estate dominated by Phoenix foreclosures

Record Setting December 2009 Fueled by Phoenix Foreclosures

Yes, it's true. December saw7,670 residential sales in metro Phoenix. Foreclosures dominated those sales numbers, though the sales total wasn'tquite the all-time high. December 2004 was the only month in this last decade that had higher sales, and that was by less than 200 homes. Is that an amazing feat for Phoenix,foreclosures sales included? Definitely, considering that December is historically one of the lower sales months in the entire year as people turn towards holiday shopping and parties. It's also an impressive feat considering all of that doom and gloom reporting on the national (and local) economy seen in the Az Republic newspaper, Phoenix. Foreclosure sales made up 65.6% of December 2009 sales.

Take a look at these numbers from the Arizona Regional MLS. Sales include metro Phoenix foreclosures and normal sales.

MONTH - SALES
2009 - 7,670
2008 - 5,630
2007 - 3,347
2006 - 5,311
2005 - 6,527
2004 - 7,829
2003 - 6,311
2002 - 5,954
2001 - 4,531
2000 - 3,907

Additionally, 2009 recorded the third highest residential sales in the last decade. 2004 and 2005 (boom years) were the only two years with higher residential sales in the Phoenix real estate market. Phoenix foreclosures accounted for 69.7% of all sales in 2009.

33,014 more homes were sold in 2009 than in 2008, or a 55.7% increase!

YEAR - SALES
2009 - 92,292
2008 - 59,278
2007 - 54,231
2006 - 74,106
2005 - 104,133
2004 - 98,294
2002 - 68,411
2001 - 62,523
2000 - 55,400

There are currently 33,278 homes for sale in Metro Phoenix. Foreclosures account for 42% of all active listings. Sales are off to a pretty good start in January 2010 after a great December 2009.

Foreclosure homes in Arizona

Phoenix Foreclosures for Sale

Phoenix Foreclosures

Active Phoenix foreclosures exceeded 41% of all homes for sale to begin January 2010. This information is seen in the orange color on the first chart. I've defined Phoenix foreclosures as both bank owned property and real estate short sales, though;short sales are typically considered to be "pre-foreclosure." This is the first time since April 2009 the percentage has exceeded 40%, as the months of May through December 2009 averaged 38%.

The primary reason for the higher percentage is the increase in bank owned properties, as indicated in blue on the second chart. 5,380 bank owned Phoenix foreclosures mark the highest level since May 2009. Is this the beginning of more bank owned properties on the market? It does appear so, as the second chart indicates a four month increase. 2010 marks the year that many of the 5/1 adjustable rate mortgages will have rate increases and many interest only loans will revert to principle and interest loans. Expect Phoenix foreclosures to increase during 2010, but the effect will not be as devastating as was felt in 2007 and 2008 with the 3/1 ARMS. Having said that, the state of the economy in 2010 will probably have a greater effect than adjustable rate mortgages if unemployment continues on its current course.

Another statistic not shown by these charts is the number of days listings are currently on the market. The normal listings (not Phoenix foreclosures) on the market have been there for an average of 183 days. Phoenix foreclosures have been on the market for average of 106 days. The latter number would be smaller if not for the extended sale time of short sales.

The second chart indicates 5,380 bank owned properties (38.9% of all Phoenix foreclosures in red) and 8,445 short sales (61.1% of all Phoenix foreclosures in green). Watch for further increases in 2010 for both categories of Phoenix foreclosures.

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