The Phoenix Area Foreclosure Experts

DOM report for SOLD Phoenix area real estate market listings

The below chart illustrates the "days on market" (DOM) in the Phoenix area real estate market.  The chart is read this way: In February 2009 there were 1,390 "normal" sales that averaged 142 days on the market, 3,599 sales of REO property that averaged 110 days on the market, and 497 sales of real estate short sale property that averaged 161 days on the market.

  Click here to see how this compares to the active listings.

Fannie mae changes affecting investors and condos -- March 2009

Effective March 1st,  Fannie Mae banned mortgages in new condo developments where fewer than 70 percent of the units have been pre-sold. The previous cutoff point was 51 percent.

Also Fannie no longer will finance units in projects where more than 15 percent of unit owners are behind on their payment of condo dues, or where more than 10 percent of the units are owned by a single investor, individual or company.

On top of that, Fannie now declines to finance units in buildings where more than 49 percent of all units are owned by investors. Forget most resort area rental condos. Forget condo hotels.

Private mortgage insurers have joined the condo-avoidance bandwagon by either refusing to insure low-downpayment loans in any of dozens of local markets deemed to be "declining," or by charging exorbitant premiums on units in healthier markets.

Even Freddie Mac may soon be following Fannie in restricting condos sharply. It recently raised the minimum downpayment on condo unit loans to 25 percent, and added a three quarter point penalty on top of its regular fees for condos. Fannie also hits all condos with a three quarter point add on.

PMI Group on it's "BB" rating from Fitch Ratings

Here's another update on The PMI Group. As you'll remember, the PMI Group provides mortgage insurance to a large portion of the home sales market.  It's not a good time to be a mortgage insurance provider.

Fitch Ratings recently downgraded the PMI group to a "BB" rating.  The PMI Group issued the following press release today:

With respect to the ratings actions issued by Fitch Ratings today, The PMI Group, Inc. ... notes that in December 2008 it requested a withdrawal of all Fitch ratings on the Company and its subsidiaries.  As a result, PMI has not provided annual portfolio information on a confidential basis to Fitch since the fourth quarter of 2007.  As Fitch notes in its press release, it no longer regularly meets with PMI's management, nor receives non-public information from the Company.

It's no surprise that PMI no longer wants Fitch poking into its portfolio information. Although The PMI Group may be trying to tell the world Fitch is no longer qualified to give an accurate assessment of its stability, we're all pretty sure that the PMI group is in a downward spiral.

Gilbert crosses under the $100 per-square foot mark for home sales

The City of Gilbert has become the latest city in the Phoenix area real estate market to average under $100 per-square-foot for single-family residences sold in a single month.  252 single-family residences sold in Gilbert during the month of February 2009.  The average sales price of these 252 homes was $215,490.  The average size of the homes sold in February 2009 was 2,216 square feet.  This equates to an average selling price of $97 per-square-foot for single-family homes sold in Gilbert during February 2009.

El Mirage first city under $50 per square foot in Phoenix area real estate market

El Mirage has become the first city in the Phoenix area real estate market to average less than $50 per square foot in a sales month.  99 homes sold in February 2009 in the city of El Mirage -- a majority of those being foreclosure listings. Here are the statistics for those 99 sales:

• average sales price -- $78,527
• average size -- 1,595 square feet
• average price per square foot -- $49

This is obviously not a number to be proud of, but it is a casualty of the mortgage crisis and the high number of foreclosure listings.

In other parts of the Phoenix area real estate market, the Town of Maricopa is running a close second with an average of $52 per square foot.

Not a great time to be in the mortgage insurance industry

I have been watching the performance of the PMI Group, Inc. since the mortgage crisis began. The PMI Group, Inc. provides a majority of the mortgage insurance for home loans in the United States.  You can imagine this is not a great time to be in the mortgage insurance business. Here is a press release from earlier today:

 WALNUT CREEK, Calif., March 16 /PRNewswire-FirstCall/ -- The PMI Group,
Inc. (NYSE: PMI) (the "Company") today reported a loss from continuing
operations for the fourth quarter of 2008 of $181.0 million, or $2.22 per
basic and diluted(1) share.  The loss from continuing operations for the full
year of 2008 was $887.2 million, or $10.90 per basic and diluted(1) share.
The loss from continuing operations for the fourth quarter of 2008 was
primarily due to losses and loss adjustment expenses (LAE) in the U.S.
Mortgage Insurance Operations and PMI Europe, a decrease in premiums earned
and higher net realized investment losses, primarily from the impairment of
certain corporate preferred equity securities in U.S. Mortgage Insurance
Operations' investment portfolio.

What cities lead the Phoenix area real estate market with inventory turns?

 
It's no real surprise that Queen Creek and the Town of Maricopa lead this category. The reason: some of the most affordable homes for sale because of the abundance of foreclosure listings.

Queen Creek has sold an average of 19.3% of it listings every month over the last 12-months. This means it has taken an average of 5.4 months to turn over the complete listing inventory  of this city. During those 12-months an average of 63.4% of the sales were foreclosure listings.

The Town of Maricopa has sold an average of 16.6% of it's listings every month over the last 12-months. This equals 6.3 months to turn over the complete listing inventory  of this town. During those 12-months  an average of 60.2% of the sales were foreclosure listings.

By contrast, the entire Phoenix area real estate market has sold an average of 10% of it's listings every month over the last 12-months. This equals 10 months to turn over the complete listing inventory of the Phoenix area real estate market. During those 12-months  an average of 48.3% of the sales were foreclosure listings.

Foreclosure Reports -- 10 cities in the Phoenix area real estate market

The Phoenix area real estate market has been volatile since 2004.  Dramatic price increases began in 2004 and ended in December of 2005.  Foreclosure listings began appearing in 2006.  Foreclosure listings are comprised of REO property and real estate short sales.  Foreclosure listings have been on the rise since 2006.

Foreclosure listings have been dominating the Phoenix area real estate market. In early 2009, 43.7% of all listings in the Phoenix area real estate market were foreclosure listings. However, nearly 75% of all sales were foreclosure listings.  REO property accounted for 85% of all sales.  REO property has been the dominant force in the Phoenix area real estate market beginning in 2006 and continuing throughout 2009.  Foreclosure listings, particularly REO properties are shaping the pricing structure in the Phoenix area real estate market.

Ten city foreclosure report

Phoenix area real estate market conditions -- a sampling of 10 cities

The Phoenix area real estate market has continued its downward decline in property prices through February 2009. Foreclosure properties, which include REO property and real estate short sales, continue to dominate the market. After several years of gloom because of foreclosure properties, there are some signs that prices may begin to stabilize within the next year.  However, there is no perfect crystal ball, and it will ultimately depend on the drying up foreclosure properties.

Click on the link below to see a sampling of prices and trends in 10 cities in the Phoenix area real estate market. This information is hosted on another one of my sites:

Phoenix area real estate market conditions.

Phoenix leads area cities with high sales of foreclosure listings

Foreclosure listings are dominating real estate sales in the Phoenix area real estate market  for February 2009. The following cities have a very high percentage of sales that were foreclosure listings:

• 84.9% -- Phoenix (1,362 SFR sales / 1,156 sales of foreclosure properties)
• 84.4% -- Queen Creek (307 SFR sales / 259 sales of foreclosure properties)
• 82.3% -- Glendale ( 266 SFR sales / 219 sales of foreclosure properties)
• 79.7% -- Town of Maricopa ( 172 SFR sales / 137 sales of foreclosure properties)
• 69.4% -- Mesa (396 SFR sales / 275 sales of foreclosure properties)
• 69.4% -- Gilbert (252 SFR sales / 175 sales of foreclosure properties)

See last month's results