The median price paid for a home in the Phoenix area last month rose to a 41-month high, increasing on a year-over-year basis for the sixth month in a row. The region’s overall sales trended slightly higher as mid- to high-end activity jumped again, compensating for a sharp, ongoing slide in sales of lower-cost homes, especially foreclosures, a real estate information service reported.
In May, buyers paid a median $150,000 for all new and resale houses and condos sold in the combined Maricopa-Pinal counties metro area. It was the highest median for any month since December 2008, when the median was $154,000. Last month’s median rose 5.6 percent from April and rose 25 percent from May 2011, according to San Diego-based DataQuick, which tracks real estate trends nationally via public property records.
The median's 25 percent year-over-year increase in May followed annual gains of 18.3 percent in April, 13.8 percent in March, and 7.5 percent in each of the prior three months.
Last month’s median sale price stood 43.2 percent below the all-time peak of $264,100 in June 2006, but it was 26.7 percent above the median’s post-peak trough of $118,347 in August 2011.
To some extent, the large year-over-year gains in the median sale price over the past two months reflect increased pressure on home prices. Ultra-low mortgages have helped trigger more demand at the same time the inventory of homes for sale has dwindled.
But the year-over-year jump in the median price also reflects two other trends: First, in recent months the region’s mid- to high-end markets have represented a substantially larger share of total sales. For example, last month 33.1 percent of all sales were above $200,000, compared with 24.7 percent a year ago. Second, there’s been a substantial drop in the portion of all resales that are foreclosed properties, which tend to carry significant discounts and be concentrated in lower-cost areas.
Foreclosure resales, defined as homes that were foreclosed on in the prior 12 months, fell to 24.3 percent of the resale market last month, the lowest level for any month since February 2008, when they were 22.8 percent. May’s foreclosure resale level fell from 26.6 percent the month before and 50.8 percent a year earlier. The peak level for foreclosure resales was 66.2 percent in March 2009.
Last month, a total of 9,892 new and resale houses and condos closed escrow in the two-county Phoenix region, up 4.4 percent from the month before and up 1.7 percent from a year earlier. On average, May home sales have risen 4.7 percent from April since 1994, when DataQuick’s complete Phoenix region statistics begin.
Total home sales in May were 7.6 percent short of the average number sold that month, mainly because new-home sales remain far below average. Resales of houses and condos combined in May were 5.9 percent above the historical average for that month. New-home sales were 56.4 percent below average for the month of May. However, sales of newly built homes have been on an upswing of late. They have risen year-over-year for 11 consecutive months, and May's 1,016 new-home sales were the highest for the month of May since 2008.
On a year-over-year basis, sales last month fell hard in the lower price categories. The number of new and resale homes that sold in May for less than $100,000 dropped 34.3 percent from a year earlier, while sales under $150,000 decreased 17.6 percent. Deals between $200,000 and $400,000 rose 37.9 percent year-over-year, while sales above $500,000 rose 36.5 percent. May transactions above $800,000 rose 17.7 percent from a year earlier.
Other Phoenix region May highlights:
• A key price gauge analysts watch, the median price paid per square foot for existing single-family detached houses, increased in May to $83, the highest since November 2008, when it was $84. Last month’s figure rose 5.1 percent from the month before and increased 23.9 percent year-over-year. The median paid per square foot has risen year-over-year for six consecutive months. The May figure stood 51.4 percent below the $171 peak median paid per square foot in May and June of 2006.
• At the county level in May, the median price paid per square foot for resale single-family detached houses in Maricopa County rose to $85, up 2.4 percent from the prior month and up 20.9 percent from a year earlier. It was the sixth consecutive month with a year-over-year gain. The Pinal County median paid per square foot was $60 last month, up 7.1 percent from the prior month and up 30.6 percent from a year earlier, marking the eighth consecutive month to see a year-over-year increase.
• Short sales, where the sale price fell short of what was owed on the property, represented an estimated 12.6 percent of last month’s resale activity. That was the same as the estimate for April and it was down from 13.7 percent a year earlier.
• Lenders foreclosed on 2,385 Phoenix-area homes last month, up 8.9 percent from the month before and down 51 percent from a year earlier. The number of homes lost to foreclosure between January and May this year totaled 12,475, down 53.8 percent from the same period last year.
• Absentee buyers, who are mainly investors and vacation-home buyers, bought 39.7 percent of all Phoenix-area homes sold last month, down from 40.2 percent the month before and down from 45.3 percent a year earlier. The peak was 47.1 percent in March 2011. Last month, absentee buyers paid a median $122,750, up from $118,750 the month before and up 20.9 percent from $101,500 a year earlier.
• Buyers paying cash bought 43.3 percent of all homes sold last month. That was down from 45 percent the prior month and up from 42 percent a year earlier. The record for cash buying was 48 percent in February 2011. Last month’s cash buyers paid a median $124,000, up from $120,000 the month before and up 37.8 percent from $90,000 a year earlier.
• The market share for FHA home loans, a popular choice among first-time buyers, fell to a more-than-four-year low. Last month 26.4 percent of all Phoenix-area home purchase loans were government-insured FHA mortgages, down from 28.4 percent the month before and down from 35.3 percent a year earlier. Last month’s figure was the lowest since the FHA share of the purchase loan market was 25.3 percent in March 2008.