In Housing Market

With the close of the 1st quarter Phoenix real estate numbers we can now get a more accurate picture of where certain parts of the market might be heading. Construction numbers continue to show strength for the quarter, edging up a combined 10.83%. The outlook remains positive as strong numbers continue to come in from all counties that we cover. With the sun setting of the home buyer tax credit, the activity that our tax dollars have been paying for finally showed up — all three counties reported impressive double digit gains since February. However, foreclosures ticked up slightly in March and finalized trustee sales closed out the quarter at their highest levels on record.

Buyer Urgency Kicks In – Phoenix Real Estate Sales Rocket in March

With the expiration of the tax credit on the horizon buyers flocked to the market pushing Phoenix real estate property sales to their highest levels in eight months. However, for the quarter, sales were down 15% overall which explains the government’s hesitation to extend the tax credit again. The one thing that can be said about the effects of the tax credit is though it may have fueled an increase in overall volume it does not appear that the credit was as effective as to alter seasonal trends that we are used to seeing.

We expect sales volume to fall slightly leading up to the summer as the remainder of those who are under contract close on their homes and those in play that are only after the credit drop out. However, buyers who come to the market after the credit has expired are probably in a better position than those competing for homes leading up to the expiration.

Here is a look at how the markets are doing in your area

Total Property Sales
County February 10 March 10 MOM % +/- YOY % +/-
Maricopa
6,676
9,116 36.55% 14.48%
Pima
1,032
1,610 56.01% 25.49%
Pinal
1,024
1,390 35.74% 1.98%

Overall Monthly Comparison

Total Property Sales 
County Q4 2009 Q1 2010 QOQ % +/- YOY % +/-
Maricopa 25,687 21,870 -14.86% 19.38%
Pima 4,309 3,612 -16.18% 21.90%
Pinal 3,984 3,390 -14.91% -8.99%

Monthly Breakdown (MAR 2010)

Maricopa County Pima County Pinal County
Single Family Homes 7,757 1,294 1,206
Condo/Townhomes 811 120 15
Mobile Homes 80 42 36
2-4 Plex 42 9 5
Apartments 18 3 2
Commercial/Industrial 110 24 10
Agriculture 5 3 5
Vacant Land 270 106 101
Other 23 9 10
Totals: 9,116 Sales 1,610 Sales 1,390 Sales

Top Zip Code for Sales

County Highest Number of Sales Zip Code With Highest Sale Price
Maricopa 85326 (Buckeye) 204 Sales 85255 (Scottsdale) 111 Sales
Pima 85614 (Green Valley) 106 Sales 85718 (Tucson) 40 Sales
Pinal 85143 (San Tan Valley) 140 Sales 85739 (North Tucson) 14 Sales

Permitting Closes Out Quarter Up 10.83%

Permitting continues to show strength in all three Phoenix real estate markets, ticking up an average of 10.83% for the quarter and 11.05% for the month. Totals coming in so far for April remain stable at these levels and contractors out there can expect a fairly strong level of activity leading into the summer. Home building and residential permitting (additions/remodels/etc) continue to drive the market. We expect that the gap in year over year changes will probably begin to level off as we approach the summer. This would show several months of stability in the market.

Overall monthly comparison:

Building Permits
County February 10 March 10 MOM %+/- YOY % +/-
Maricopa
1,432

1,598
11.59% 25.63%
Pima
456

498
4.83% 21.76%
Pinal
220

245
11.36% 31.72%

Overall Quarterly Comparison

Total Permitting
County Q4 2009 Q1 2010 QOQ %+/- YOY % +/-
Maricopa
3,786

4,202
10.99% 22.54%
Pima
1,120

1,389
24.02% 23.46%
Pinal
766

695
-9.27% 52.41%

Here’s a look at how each segment performed in March:

County Custom Homes New Homes Residential Permits Commercial Permits Pool Permits
Maricopa 43 598 424 238 295
Pima 18 197 170 61 52
Pinal 8 165 19 14 39

The Top Jobs In Each County For January:

County Job Description Permit Value Permit Date
Maricopa Ferrantello Custom Home
Scottsdale, AZ
$1,100,379 3/31/2010
Court Building
Phoenix, AZ
$47,956,800 3/22/2010
Pima Holte Custom Home
Oro Valley, AZ
$680,935 3/8/2010
New Car Wash

Tucson, AZ
$1,040,283 3/9/2010
Pinal Sleeper Custom Home
Apache Junction, AZ
$339,231 3/11/2010
Shea @ Entcanterra Clubhouse
Queen Creek, AZ
$4,888,519 3/2/2010

Quarter to Quarter Consumption Rate Rockets To 61.38%

Trustee Deed filings throughout the first quarter stayed at levels we have never seen before. We’ve heard that the cause in the increase in foreclosures may have been from failed modifications from 2009 or perhaps banks stocking as many houses on the market as possible in the waning days of the tax credit. Over the last two years this number has hovered between 43-53%. This was a dramatic jump and the highest level during this time period.

It is very possible that new notice filings may slow down in the next few months as banks adjust their strategy. The tax credit expiring will probably prove to be a very good thing for Phoenix homeowners facing foreclosure. Some Phoenix real estate may face longer days on the market and possible price drops after the credit expires, thus modifications may prove to be the better route after all. During this period of adjustment it is possible that both new foreclosure filings and trustee deed filings may drop.

Overall monthly comparison:

Foreclosure Filings
Type February 10 March 10 MOM % +/- YOY % +/-
Maricopa 7,552 8,016 6.14% -25.00%
Pima 935 1,079 15.40% -6.50%
Pinal 936 987 5.45% -27.90%
*Notice of Trustee Sales

Overall quarterly comparison:

Total Foreclosure Filings
County Q4 2009 Q1 2010 QOQ %+/- YOY % +/-
Maricopa 13,892 13,901 -1.53% -19.81%
Pima 2,600 2,854 9.77% -6.49%
Pinal 2,925 2,840 -2.91% -23.96%

Monthly Breakdown (March 2010):

Maricopa County Pima County Pinal County
Single Family Homes 6,512 828 868
Condo/Townhomes 1,060 107 7
Mobile Homes 108 88 72
2-4 Plex 106 20 4
Apartments 22 0 1
Commercial/Industrial 86 8 5
Agriculture 4 1 2
Vacant Land 115 27 28
Other 3 0 0
Totals: 8,016 Notices 1,079 Notices 987 Notices

Source: Ion Data Express, Publishers of Home Sales, Building and Foreclosure Reports. Toll-free phone: 877-466-5478

Comments
  • Gary Bryan

    Businesses that market to home buyers are reporting an increase in response rates. That’s encouraging because for the last three years that market has been almost nonexistent. We have suggested to our clients is that they mail three or four months after the sale date. This allows time for the home buyer to make any necessary repairs before they move in. Otherwise advertising that’s sent to the new address is actually going to an unoccupied property. The strategy of waiting seems to be working. / GB

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