Greater Phoenix / Scottsdale Home Prices Down; Supplies Down

As a result of a reduction in distressed sales including short sales, foreclosures and pre-foreclosures, Phoenix area home sales dropped 4.4% in June and down 6.6% when compared with the previous year according to a report from Michael J Orr, Director of the Center for Real Estate Theory and Practice at ASU’s WP Carey School of Business.

Short Sales and Pre-foreclosures Demand Still Elevated

The ASU report for August 2012 also states that, “Most
lenders are strongly encouraging homeowners facing financial hardship to use
short sales as a preferred alternative to foreclosure. Consequently we have
seen single family short sales volumes grow by 12% over the last year, while
foreclosure rates have declined sharply. Average $/SF pricing for these homes
has reversed direction over the last few months and is now by up by 6.6%
compared with 12 months ago. Short sales and pre-foreclosures represent about
20% of single-family home sales, up from 17% in July 2011. Short sales and
pre-foreclosures are selling for a lower average price per sq. ft. than bank
owned homes, which is the reverse of the situation 12 months ago. However
pricing is higher than for Fannie Mae / Freddie Mac / VA REOs.”
Real estate professionals have seen an increase in new homes, traditional re-sales and short sales / pre-foreclosures year-over-year.  On the other hand, investor flips, REO’s, Fannie Mae and Freddie Mac and 3rd party
purchases at trustee sales have dropped significantly, according to Carrie
Lehrman of The SRL Group, a boutique real estate broker in PhoenixPhoenix areas including Desert Ridge, Biltmore, Chandler, Arcadia, North Scottsdale, Mesa and Tempe continue to experience high demand.

Phoenix Area Demand Drop

The hot summer season traditionally results in a short-term decrease in seasonal real estate sales around Maricopa and Pinal Counties.  According to Lehrman, she expects that the short-term price reduction will persist through September within the Scottsdale and Phoenix markets.  Phoenix was one of the hardest hit areas during the real estate recession.  Home owners and buyers alike; seem to appreciate the newfound floor on declining home prices in Arizona.