The 'good' news: Plummeting median price sparks 49% sales jump
by J. Craig Anderson - Feb. 13, 2009 12:00 AM
The Arizona Republic
Phoenix-area home foreclosures were on the rise again in January after a holiday break from bank repossessions, according to the latest home-resale figures from Arizona State University.
It's a troubling start to a year in which many experts believe foreclosure activity will reach its peak, as equity continues to dissolve and another wave of foolish-in-retrospect mortgage loan products reset to higher monthly payments.
The upside in January was a 49 percent increase in detached, single-family home resale activity from a year earlier, according to the report from Realty Studies at the Morrison School of Management and Agribusiness at ASU Polytechnic.
Still, resales were down 17 percent from December 2008.
The foreclosures driving up sales in recent months have created opportunities for many buyers, but they also have forced residents out of their homes and chipped away at property values across the Valley, said Jay Butler, Realty Studies director.
Deep anxiety about the country's economic future leaves little chance of a housing-market recovery this year, he added.
"The local housing market will continue to be vexed well into the next year by eroding consumer confidence, brought on by a weak economy, possible job losses and tighter mortgage underwriting guidelines," Butler said in his report.
Michael Brauneis, a financial loss-mitigation expert and consultant to the mortgage industry, agreed that things are likely to get worse before they get better.
Brauneis said his biggest concern is the high number of interest-only "Option ARM" and stated-income "liar" loans scheduled to reset to higher monthly payments in the coming year.
Such loans can be difficult to modify, because in many cases the borrower's income simply isn't high enough to afford payments that include both interest and principal, he said.
"Foreclosure rates are definitely still on the way up," said Brauneis, director of Protiviti, a subsidiary of Robert Half International.
"It's going to get ugly."
In January, the median sale price for single-family detached homes in Maricopa County was $136,000, ASU reported.
That's a 44 percent drop from the median of $243,000 the previous January.
Home prices fell 7 percent from December's median resale price of $146,000, according to ASU.
In the past two months, a high volume of sales in Phoenix at disproportionately low prices has pulled down the median home price Valleywide.
In December, 1,360 Phoenix homes were sold at a median price of $90,000.
In January, the number of sales decreased to 1,190, while the median price fell to $74,500, ASU reported.
The Phoenix median price was January's lowest in the Valley, surpassing perennially last El Mirage, which had a median home price of $76,125.
As usual, other areas fared considerably better, Butler said.
Chandler's median price was $230,000 in January, down roughly 18 percent from $280,000 a year earlier.
The median price in Tempe experienced a reduction of 14 percent, from $255,000 to $219,000.
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