Read this chart in this manner: 9,358 properties sold in the Phoenix area real estate market during June 2009.  6,608 were Metro Phoenix foreclosures -- or 70.6% of all properties sold in the Phoenix area real estate market during June 2009.

Large sales volumes continue to be recorded in the Phoenix area real estate market. The sales in June 2009 reached 9,358, up slightly from May 2009's numbers. Sales over the last three months have been phenomenally high and rival sales during the boom years of 2004 and 2005. This continued demand for homes seems to indicate that prices are just too good -- and too low -- for consumers to resist.

High sales and a diminishing inventory are sure signs that we are slowly moving away from a buyer's market in the Phoenix area real estate market.  However, read this article to clarify that statement.

We have now had 13 consecutive months of increases in year over year (YOY) home sales. Year over year (YOY) is a method to compare home sales in the current month to home sales in the same month of the previous year.  YOY is considered a valid statistic by many who monitor real estate activity. Obviously, increases in YOY are more favorable than decreases, and these statistics are favorable for the Phoenix area real estate market.

Also, year over year over year (YOYOY) sales have increased for 7 consecutive months in the Phoenix area real estate market.  As you can guess, this means that sales in the current month exceeded sales in the same months from the previous two years.

July 2009 began with 11,868 Metro Phoenix foreclosures on the Phoenix area real estate market.  The supply of bank owned (REO) properties has gotten low when compared to former levels.

Read the chart in the following manner: July 2009 began with 11,868 Metro Phoenix foreclosures on the MLS (residential). 4,716 of those (39.7%) were REO properties and 7,152 (60.3%)  were real estate short sales.

The chart indicates a rather dramatic shift with Metro Phoenix foreclosures. As mentioned in a previous post:

July 2009 began with 11,868 Metro Phoenix foreclosure listings on the Phoenix area real estate market. Metro Phoenix foreclosures are comprised of bank owned properties (REO) and real estate short sales. Those listings have been on the market for an average of 115 days.  This is the first time in six months that figure has an dropped to under 120 days.

The two main contributing factors to the decrease in Metro Phoenix foreclosures are: sales that have doubled since January of 2009 and the moratorium that prevented lenders from foreclosing on properties during the six-month period ending on June 1st.

Read the chart in this manner: on July 1, 2009 there were 31,920 residential listings in the Phoenix area real estate market.  That's a decrease of 2,558 from June 1, 2009.  There were 11,868 Metro Phoenix foreclosures representing 37.2% of all active listings in the Phoenix area real estate market.

Metro Phoenix foreclosures in the Phoenix area real estate market.

July 1, 2009 opened with 31,920 active residential listings on the market -- down 2,558 from last month. As you can see from the chart, there were 54,538 active listings to begin December 1, 2008.  The Phoenix area real estate market has experienced a 7-month decrease in active listings totaling 22,618.

• the pure definition of a buyers market is when "supply exceeds demand"
• the pure definition of a sellers market is when "demand exceeds supply"

8,560 residential listings sold in April, 9,330 sold in May, and we are on target to hit 9,400 in June of 2009. Those are some very impressive numbers that we haven't seen since the "boom" year of 2005. 31,920 active listings divided by 9,400 sales equals 3.4 months of inventory on the market. Inventory on hand hasn't been this low in over three years.

So are we in a buyers market, seller's market, or somewhere in between?  Click here are to read a recent post.

You'll see that the price per square foot increased from $66-$68 from March to April of 2009.  I did not write about this last month because -- face it -- it's only one month. However, you'll also see that the price per square foot increased from $68-$71 from April to May 2009.  Again, not earth shattering news, but it is the first time this has happened in 2 years.

Read the chart in this manner: May 2009 began with 7,035 active listings in the city of Phoenix.  May 2009 finished with 2,212 of those listings being sold, which is 31.4% of all active listings in the city of Phoenix.  This sales rate is equal to 3.2 months of inventory on hand.  The average size of a sold home was 1,701 square feet.  The average price was $121,169 -- which equals $71 per square foot.  Note that the average days on market was 117 days.

If you're new to this blog and wonder why I place more emphasis on price per square foot-- click here.

We have a very unique situation in the Phoenix area real estate market.  Let me explain: the mid-level and upper level homes are still in a buyer's market because there is more supply than demand.  However, the lower-level homes (under $100,000) are in a seller's market.  There is clearly more demand than supply.

The situation has been building over the last six months in the Phoenix area real estate market.  Homes in the lower level segment are attracting anywhere from 3-15 offers within the first week on the market. This is resulting in homes demanding a "highest bid" and selling over the asking price. 

The chart illustrates this demand.  Read it in this manner: 9,330 residential properties sold in May of 2009 in the Phoenix area real estate market.  3,866 of those properties sold for under $100,000 ( 41.4% of all sales). However -- of the 3,866 homes that sold for under $100,000 -- 3,519 (91%) were Metro Phoenix foreclosures. The situation in this market segment resembles the frenzy of 2005.

By Allen D. Butler, Esq. at www.legalaz.com, 480-921-0626 

Loan Modification Efforts Paying off—but beware of  Scam artists

 Recent news articles have highlighted two trends in the Loan Modification:

1. More lenders are participating in the Making Home Affordable program announced by the Obama administration last March—and, borrowers are in fact getting their loans modified—but progress is still slow!

Nationwide, over 150,000 borrowers have received a modification proposal on their home loans, according to CBS news.  Over 14 loan servicers, including the 5 largest have signed up for the program.  See a list of servicers at http://makinghomeaffordable.gov/contact_servicer.html.

The Making Home Affordable program offers two options to homeowners:

1.  The “Home Affordable Refinance Program” offers homeowners an opportunity to refinance their mortgages with lower rates.  There are some limitations however—including a loan to value ration no higher than 110%, and a good payment record.  In addition, this program applies only to Freddie Mac or Fannie Mae backed loans  Unfortunately many homeowners in Arizona will not qualify for this program because their homes are worth significantly less than what they owe.

3.  The Home Affordable Modification Programs offers homeowners a modification of their existing mortgage with their existing lender.  The general guideline is that the home owner is eligible for modification if the current mortgage payment on the first mortgage is more than
31% of the homeowner’s gross monthly income. 

So if Mr. and Mrs. Smith have a combined monthly income of $4,000 and their monthly mortgage payment is $1,600, they would be eligible to have their mortgage payment reduced to $1,240 a month,--including principal interest, taxes, insurance and Home Owner Association payment.

 You can see some Arizona success stories at www.legalaz.com.

2. Arizona Homeowners need to beware of  crooks and scam artists who take their money and do nothing.

Recent news articles have noted that Homeowners need to be aware of crooks and scam artists.  See the April 6 Press release from the Treasury department at www.legalaz.com (click on “Be careful who you hire”).  

Unfortunately, not everyone who contacts you is truly interested in helping you. In the recent past some of our clients have been contacted by companies or individuals who offer to help you modify your loan or save your home from foreclosure. Some of these individuals are legitimate, but some ARE NOT! They will take your money and then DO NOTHING. You will be much further ahead to hire a reputable firm who charges a reasonable fee.

The following five cities ranked among the highest in terms of percentage of sales that were of Metro Phoenix foreclosures:

• 86.8% -- Glendale (466 Metro Phoenix foreclosures/537 total sales)
• 84.9% -- Town of Maricopa (265 Metro Phoenix foreclosures/212 total sales)
• 81.6% -- Phoenix (1,804 Metro Phoenix foreclosures/2,212 total sales)
• 77.0% -- Queen Creek (371 Metro Phoenix foreclosures/482 total sales)
• 70.3% -- Gilbert 317 Metro Phoenix foreclosures/451 total sales)