Housing resales in Valley were up in 2008

Rocketing foreclosures dragged down prices

by J. Craig Anderson - Jan. 15, 2009 12:00 AM
The Arizona Republic

Valley home-resale transactions increased slightly in 2008 from the previous year, but foreclosure activity more than quadrupled, dragging the median resale price down 23 percent, the latest Arizona State University report shows.

Resales totaled 46,745 in 2008, up nearly 2 percent from 46,035 the previous year, according to a report issued Wednesday by ASU's realty studies in the Morrison School of Management and Agribusiness.

The median resale price for detached single-family homes fell 23 percent from 2007 to 2008 without including foreclosed-on home prices. The decline was 27 percent with foreclosures factored into the total.

The median resale price for condominiums and town homes decreased by 11 percent in 2008, without including foreclosures, and by 15 percent with foreclosures included.

Foreclosure activity on detached, single-family homes, also known as trustee sales, increased 310 percent, from 8,535 in 2007 to 34,955 the following year, according to ASU.

Realty-studies Director Jay Butler predicted the housing slump will continue well into 2010 with "eroding consumer confidence, possibly additional job losses and tighter mortgage-underwriting guidelines."

The market's best hope is that more homeowners will receive loan-modification agreements from their lenders in 2009 to help them prevent foreclosure, Butler said.

"Unfortunately, the extremely weak economy is leading to mounting job losses that could severely impact the ability of a troubled household to have the needed income to qualify for one of the possible programs," he said.

Foreclosure activity has skyrocketed as home equity has evaporated and many homeowners' monthly mortgage payments have reset to higher interest rates.

Butler noted that price declines and trustee-sale activity varied considerably throughout the Valley in 2008.

El Mirage in the West Valley suffered the sharpest decline in home-resale prices, with the median falling 38 percent to $120,000 from $195,000.

Homes in Sun City West retained the greatest percentage of their resale value from 2007 to 2008, with the median price decreasing 11 percent.

The age-restricted West Valley community also had the fewest foreclosures by far, with only 35 trustee sales for the entire year, up from 15 foreclosures in 2007.