Inventory high, foreclosures low in the Valley
Real estate in Phoenix is increasingly showing signs of activity as prices continue to increase simultaneously as more inventory becomes available. The city was experiencing high prices because of the lack of homes for sale for months, but the Phoenix-metro area finally saw notable rise.
According to the Phoenix Business Journal, existing inventory in the Valley of the Sun increased 3 percent between July and August to more than 10,000 homes. A recent housing report released by Arizona State University found that more than 75 percent of the homes for sale were priced above $150,000, which is the median single-family home price. This shows a 1 percent increase from July. However, inventory still remains below the average for the last 10 years.
As home prices continue to increase, more people are looking to sell their homes because they are worth more. This has created a drastic shift, and is considered one of the biggest reasons why the market in Phoenix is looking brighter. In May, the inventory was the equivalent of a 15-day supply of homes for sale. That number increased to a 27-day supply in August.
The Phoenix area is also experiencing a falling foreclosure rate, although the city still has one of the highest inventories of distressed properties in the country. According to a housing report released by CoreLogic, the percentage of homes in any stage of the foreclosure process was down to 2 percent in August from 2.18 in July. The rate was a notable decrease from the 3.5 that occurred in August of last year.
The 2 percent rate was below the national foreclosure rate of 3.2 percent in August. The Phoenix area held the No. 2 spot for the most foreclosed properties between August 2011 and 2012 at 31,059 homes.
“While we are seeing improvement on a national level, there remain higher concentrations of foreclosures in some areas with five states accounting for nearly half of all completed foreclosures nationwide during the last year,” Mike Fleming, chief economist for CoreLogic, said in the report.
The competitive market in Phoenix has created a slight disadvantage to the traditional homebuyer, according to the Phoenix Business Journal. In some cases, large investment companies are coming in to purchase homes in bulk for rental use, and others are nabbing properties with cash in hand.