Phoenix Market Update

Today in the Arizona Regional Multiple Listing Service (MLS) there are reported to be 17,295 active available homes for sale. This is down from the last report I shared a month ago when there were 22,750 active homes on the market. Where are all the properties going? Why is the inventory slipping at such a rapid rate? Are we really seeing signs of recovery?

There are currently 10,850 homes sale pending with another 7,023 homes under contract accepting back up offers. Add these two numbers together and we have more properties with accepted offers then we do available inventory -- even in the 2003-2005 boom this never happened to our inventory!

So what is happening? According to a report by RealtyTrac, there are processing problems with the major mortgage servicers due to the robo-signing antics we heard about last fall.

There were several big banks, in 50 different states, under investigation for so-called “fraudulent” foreclosure proceedings which has caused the pendulum to swing the other way -- we went from hundreds of files being funneled through the foreclosure channels daily to a screeching halted which has resulted in minimal new inventory coming onto the market.

RealtyTrac reported, lenders issued a foreclosure filing on more than 1.1 million properties in the first half 2011, down 29% from the same period one year ago. More than 608,000 properties received a filing in the second quarter, down 32% from the same period last year. And foreclosures in June were down 29% from one year ago, the ninth straight month of yearly declines.

"It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market," said RealtyTrac CEO James Saccacio. "Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn’t appear to be the case."

"Processing and procedural delays are pushing foreclosures further and further out," Saccaccio said. "This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number."

It is projected that this robo-signing mess, which is still being sorted out and corrected by big banks, could push the pending foreclosure inventory well into 2012 before it is completed addressed. However, each month, the foreclosure process seems to be showing signs of life. In June foreclosure filings across the country increased 4%.

Here, in our Phoenix Market, we had a record number of sales in June – 5,114 homes closed! Although the inventory is lower than normal properties are flying off the shelves in record numbers. We are seeing signs of stabilization and in some communities prices are starting to increase due to multiple offers. I know there is still a lot of uncertainty, especially when we read reports such as the one I have shared. But I will tell you, in my 25 year career, I have never experienced a market like we are in today. Housings we sold 5 years ago or even 10 years ago are now for sale for thousands less -- even with the looming possibility of foreclosure inventory continuing for years to come, we are still at a record low for home pricing. It is a great time to buy -- first time, move up, investment or vacation home -- take advantage of the market and buy now!