With great fanfare the real estate media announced that the number of homes on the market in parts of the greater Phoenix area had declined in the last few months. As detailed in Part 1 of this blog, certain cities showed a decrease in the monthly supply of homes for sale. The assumption by observers was that the amount of distressed inventory was decreasing because lenders no longer foreclosing on as many homes.
A look at the area numbers do show a decline in sales. According to the figures available from the National Assoc. of Realtors at http://www.realtor.org/research/research/metroprice, sales of condos for the first quarter of 2009 declined from the last quarter of 2008 in the Phoenix/Mesa/Scottsdale area, and were down -40.5% compared to 2008. Single family homes had a similar decline, with a 41.9% decrease. But does mean there are less foreclosed homes for sale, or is it just a reflection of the continued deterioration in the market in general?
Our research shows that the number of homes acquired as a result of foreclosures by lenders in Scottsdale appears to be holding steady. In addition, it has been reported that lenders are not putting all the homes they acquire on the market at the earliest opportunity. Moreover it appears that lenders are delaying instituting or completing foreclosures on homes with delinquent loans.
The good news is that this means properties will continue to be available to buyers for a reasonable price. For the ordinary non-lender seller, this also means that prices should hold steady without further declines. Those sellers who had been forced to take their homes off the market due to a lack of offers should be able to re-list their properties and sell them now. The bad news is any decline in the number of homes on the market doesn’t mean prices are going to dramatically increase due to limited inventory anytime soon.
It is beyond the scope of this blog to examine in any detail the intricacies of our current real estate market, so we invite you to contact us to discuss your real estate needs further.