The Phoenix Area Foreclosure Experts

All signs point to another big sales month for Phoenix area real estate-- July 2009

All signs indicate we will have another month with residential sales in the range of 9,000 properties in the Phoenix area real estate market for July 2009.

Metro Phoenix foreclosures continue to drive activity.  On a daily basis I continue to see:

• a flurry of activity for Metro Phoenix foreclosures under $100,000
• 5-10 offers being submitted for nice Metro Phoenix foreclosures
• real estate short sales picking up
• agents and buyers with an urgency to see properties in the Phoenix area real estate market within the first two days so they may submit offers quickly

July 2009 will be the fifth consecutive month with high sales volumes in the Phoenix area real estate market.

Real estate short sale -- short sale problem lender-- EMC mortgage Corp.

Stubborn lenders can get in the way of completing a real estate short sale. EMC Mortgage Corp. turned out to be such a short sale problem lender.

I had five offers on a real estate short sale in the Glendale, Arizona area from May - July 2009. The offers came in over 2.5 month period.  Each offer was rejected by EMC Mortgage Corporation. The idea of a real estate short sale is to stop foreclosure and reduce the impact on the owner's credit. It also helps the lenders by reducing their foreclosure costs and limiting the build up of bank owned properties acquired at the trustee sale. Of course, the completion of a real estate short sale to stop foreclosure requires the help of a realistic bank or lender.

Lenders base their opinion about the value of a property on what's known as a BPO (broker price opinion, or a scaled-down version of a full-blown appraisal). EMC Mortgage Corporation received a BPO from a local realtor that convinced them this property was worth between $100,000 -- $115,000.  They received this BPO in late May 2009.

First of all, the BPO came in way too high.  I found between six and seven properties within 1 mile with an average selling price under $85,000. What turned EMC Mortgage Corporation into a short sale problem lender is their refusal to evaluate more recent comparable market sales.

Each of the agents submitting offers for their clients did their own comparable market sales and submitted offers under $85,000 for this real estate short sale.  My sellers promptly agreed to each sale and I forwarded the contracts to EMC.  Each time EMC Mortgage Corporation counter-offered with a sales price of $99,000.  Each time I forwarded recent comparable sales that indicated $85,000 was a top notch price for that house.

My comparable market sales were indisputable and I wanted to stop foreclosure on my clients. EMC Mortgage Corporation held on to that erroneous and high BPO from late May 2009 and refused to look at the more recent sales. The fifth and final offer came three days before the scheduled trustee's sale.  This offer was for $80,000.  EMC mortgage Corporation rejected the offer and foreclosed on the property.

I am confident this property will sell for less than $85,000 when it switches over to the REO property division of EMC Mortgage Corporation. EMC mortgage Corporation gets my vote --and the vote of my clients -- for a short sale problem lender.

June 2009 -- 38.5% of Phoenix area real estate sales are homes under $100,000

38.5% of all homes sold in June 2009 in the Phoenix area real estate market were homes under $100,000.  90.1% of those homes were Metro Phoenix foreclosures.  These homes sales have played a major role in the decreasing home values in the Phoenix area real estate market. As stated in a previous post, 70.6% of all sales in June 2009 were Metro Phoenix foreclosures.

These homes under $100,000 have created a unique situation in the Phoenix area real estate market: a "seller's market" within the larger "buyers market." Click here for more details.

Read the chart in this manner: 9,358 homes sold in June 2009 in the Phoenix area real estate market.  3,599 were homes under $100,000, or 38.5% of all homes sold in the Phoenix area real estate market. 3,242 of those homes were Metro Phoenix foreclosures, or 90.1% of all homes under $100,000.

Note that the percentage of "sold" homes under $100,000 has been on a two-month decline from the 43% recorded in April 2009.

Metro Phoenix foreclosures June 2009 "solds"-- REO property versus real estate short sale

The composition of "sold" Metro Phoenix foreclosures has continued a slow shift towards real estate short sales.  As shown in the chart, 6,608 sales in the Phoenix area real estate market were foreclosure sales (which is 70.6% of all sales in June 2009). 5,346  were REO property (bank owned) and 1,265 were real estate short sales.

18 months ago REO property accounted for almost all sales of Metro Phoenix foreclosures.  Real estate short sales have been gaining in popularity and now account for 19.1% of the sales of Metro Phoenix foreclosures.  Once ignored by many realtors and the general public, real estate short sales have become an important part of the landscape of Metro Phoenix foreclosures.

Metro Phoenix Foreclosure sales -- Phoenix area real estate market -- June 2009

6,608 Metro Phoenix foreclosures sold in June 2009.  The total sales were 9,358 making Metro Phoenix foreclosures 70.6% of all sales in the Phoenix area real estate market. As you can see by the chart, the percentage of Metro Phoenix foreclosures has decreased over the last several months.  This trend seems to be in direct proportion to the decreasing inventory of Metro Phoenix foreclosures and the decreasing price of normal sales.  The decreasing price of normal sales is encouraging more home buyers to pass on foreclosures and pick up normal sales at a more competitive price.

Read this chart in this manner: 9,358 properties sold in the Phoenix area real estate market during June 2009.  6,608 were Metro Phoenix foreclosures -- or 70.6% of all properties sold in the Phoenix area real estate market during June 2009.

9,358 residential sales -- June 2009 -- Phoenix area real estate market

Large sales volumes continue to be recorded in the Phoenix area real estate market. The sales in June 2009 reached 9,358, up slightly from May 2009's numbers. Sales over the last three months have been phenomenally high and rival sales during the boom years of 2004 and 2005. This continued demand for homes seems to indicate that prices are just too good -- and too low -- for consumers to resist.

High sales and a diminishing inventory are sure signs that we are slowly moving away from a buyer's market in the Phoenix area real estate market.  However, read this article to clarify that statement.

We have now had 13 consecutive months of increases in year over year (YOY) home sales. Year over year (YOY) is a method to compare home sales in the current month to home sales in the same month of the previous year.  YOY is considered a valid statistic by many who monitor real estate activity. Obviously, increases in YOY are more favorable than decreases, and these statistics are favorable for the Phoenix area real estate market.

Also, year over year over year (YOYOY) sales have increased for 7 consecutive months in the Phoenix area real estate market.  As you can guess, this means that sales in the current month exceeded sales in the same months from the previous two years.

Active Metro Phoenix foreclosures July 2009 -- REO property versus real estate short sale

July 2009 began with 11,868 Metro Phoenix foreclosures on the Phoenix area real estate market.  The supply of bank owned (REO) properties has gotten low when compared to former levels.

Read the chart in the following manner: July 2009 began with 11,868 Metro Phoenix foreclosures on the MLS (residential). 4,716 of those (39.7%) were REO properties and 7,152 (60.3%)  were real estate short sales.

The chart indicates a rather dramatic shift with Metro Phoenix foreclosures. As mentioned in a previous post:

The two main contributing factors to the decrease in Metro Phoenix foreclosures are: sales that have doubled since January of 2009 and the moratorium that prevented lenders from foreclosing on properties during the six-month period ending on June 1st.

Days on market (DOM) report for Phoenix area real estate market -- July 2009

July 2009 began with 20,052 "normal" (non-foreclosures)  residential listings on MLS for the Phoenix area real estate market.  Those listings have been on the market for an average of 201 days, bringing the number of consecutive months for the average to be over 200 days to "3."

July 2009 began with 11,868 Metro Phoenix foreclosure listings on the Phoenix area real estate market. Metro Phoenix foreclosures are comprised of bank owned properties (REO) and real estate short sales. Those listings have been on the market for an average of 115 days.  This is the first time in six months that figure has an dropped to under 120 days.

Metro Phoenix foreclosures continue to shrink to start July 2009

Metro Phoenix foreclosures have continued to shrink over the last five months.  There are currently 11,868 Metro Phoenix foreclosures for sale in the Phoenix area real estate market as of July 1, 2009.

The two main contributing factors to the decrease in Metro Phoenix foreclosures are: sales that have doubled since January of 2009 and the moratorium that prevented lenders from foreclosing on properties during the six-month period ending on June 1st.

Read the chart in this manner: on July 1, 2009 there were 31,920 residential listings in the Phoenix area real estate market.  That's a decrease of 2,558 from June 1, 2009.  There were 11,868 Metro Phoenix foreclosures representing 37.2% of all active listings in the Phoenix area real estate market.

Metro Phoenix foreclosures in the Phoenix area real estate market.

Listings in Phoenix area real estate market decline for 7th straight month

July 1, 2009 opened with 31,920 active residential listings on the market -- down 2,558 from last month. As you can see from the chart, there were 54,538 active listings to begin December 1, 2008.  The Phoenix area real estate market has experienced a 7-month decrease in active listings totaling 22,618.

• the pure definition of a buyers market is when "supply exceeds demand"
• the pure definition of a sellers market is when "demand exceeds supply"

8,560 residential listings sold in April, 9,330 sold in May, and we are on target to hit 9,400 in June of 2009. Those are some very impressive numbers that we haven't seen since the "boom" year of 2005. 31,920 active listings divided by 9,400 sales equals 3.4 months of inventory on the market. Inventory on hand hasn't been this low in over three years.

So are we in a buyers market, seller's market, or somewhere in between?  Click here are to read a recent post.