Phoenix-area November home sales fell from October but jumped 62% above the unusually low levels of a year earlier, largely because of strong demand from first-time buyers and investors, MDA DataQuick reports.
The overall median price paid edged above the prior month for the seventh consecutive month, rising to $142,700, as foreclosure resales continued to play a large but fading role in the market. Even absent price appreciation, a decline in foreclosure resales puts upward pressure on the median sale price, just as the huge run-up in deeply discounted foreclosure resales over the past two years spurred dramatic declines in the median.
In November, 52.2% of the houses and condos that resold had been foreclosed on in the prior 12 months, down from 53.7% in October and the lowest since such foreclosure resales were 49.8% of all resales in September 2008. Foreclosure resales hit a high of 66.2% of resales last March.
First-time buyers and investors continued to drive the market. In November, 50.4% of all Phoenix-area home purchase loans were Federal Housing Administration mortgages. Absentee buyers, which are mainly investors but include second-home buyers, purchased 35.3% of all homes sold – a relatively high percentage in the West.
Buyers who appear to have used cash to purchase their homes accounted for 31.5% of all November sales, based on an analysis of county property records. Specifically, these were transactions where there was no indication of a purchase loan recorded at the time of sale. Some of these cash buyers could have used alternative financing arrangements outside of a typical purchase mortgage, and in some cases, these buyers might be taking out mortgages after their purchases, MDA DataQuick notes. All-cash deals are popular in many Western markets, where prices have dropped sharply and sellers favor the relative speed and certainty of cash transactions.
Foreclosure activity tapered off in November: The 4,292 single-family house and condo units lost to foreclosure represented a 22.8% drop from October and a 27% decline from November 2008. The figures are based on the number of trustees deeds filed with the county Recorder's office. The document signals that a home was lost to foreclosure.
The foreclosure totals can include units that have been approved as condos (meaning they can be sold off individually) but are currently used as apartments. Foreclosure filings have seesawed month-to-month,, and a single month's increase or decline doesn't necessarily indicate the beginning of a lasting trend.
SOURCE: MDA DataQuick