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 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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