Arizona Investors Busy As Foreclosure Short Sale Prices Drop

Posted on June 23, 2008
Filed Under Repo Homes |

In Arizona investors are busy once again following a drop of prices in short sales. To take an instance – three units measuring on an average 1440 to 2400 square feet were sold for $139,000 without delay. In Greater Phoenix the number of bank repossessed houses being sold increased with new investors entering the market.

May saw a total of 5,740 resale houses being sold. The numbers include 1,475 foreclosed units and 4,265 houses from the traditional market. A year ago the numbers were 305 and 4,915 respectively. The foreclosed units are sold to successful bidders or to the lender. There were 1,825 foreclosed houses and 3,760 non-foreclosed houses sold in April 2008.

Traditionally May is the strongest month for house transactions. This year it has showed the best performance with 4,265 sales. In 2007 May 4,570 units had been sold. The year-to-year tally in 2008, counts to 16,280 traditional and 6,435 foreclosed house sales.

For one year the housing market has been in the doldrums arising from the sub-prime mortgage lending that led to hyper action in the housing market when investors lost their cool and went into a tizzy. The fall was inevitable. But added to this there are other causes like unemployment and personal family problems that are all inter-related.

While little thought has been spared for the investors, there has been a lot of noise about the plight of borrowers struggling to save their houses. The focus has been on increase in interest rates. The basic point is that the borrowers do have an income but not enough to meet the new increased challenge in mortgage payments.

But the scene has changed. With falling income many will not have the funds to continue even with low interest rates. This has been the finding of many analysts including Jay Butler of Arizona State University. The curve of the housing market now depends on increasing food and oil prices and its pressure on the general economy.

However the sharp fall in discounted prices have triggered off investor activity. This is especially as regards the lower priced houses. The average price range in the traditional market hovered around $223,500 while that in the foreclosed market was $179,465. A year ago the traditional and foreclosed market prices were 4265,000 and $217,225 respectively.

Investor interest has picked up in the hope that the bottom has been reached and the price curve will soon start to go up.