Housing market is mixed bag

by Catherine Reagor The Arizona Republic July 7, 2010 12:00 AM

The Phoenix-area housing market continues to settle. The impact of the federal homebuyer tax credit on sales and the loan-modification program on foreclosures is still difficult to fully determine.

Indicators from the region's housing market are mixed.

The number of foreclosures climbed, but the number of foreclosure homes resold by lenders didn't. New-home sales sagged, but the median price of all home sales ticked up above expectations.

Here are the latest key housing numbers for the Phoenix area:

• Foreclosures climbed about 20 percent, to 4,894, last month, according to the Information Market. But pre-foreclosures, or notice of trustee sales, fell 5 percent, to 6,170.

The number of foreclosures canceled by lenders climbed by nearly 1,000 in June. Overall, pending foreclosures in metro Phoenix dropped 6 percent, to 42,324, last month.

• Homebuilding slowed a bit, after increasing earlier this year. There were 571 permits for new homes issued in metro Phoenix during May, down from 604 in April, reports RL Brown's "Phoenix Housing Market Letter." Still, homebuilding is up more than 50 percent so far this year from last year's pace.

New-home sales dipped to 811 in May, compared with 823 in April. New-home sales through May were down 15 percent from 2009's level. Builders reported a boost in sales through April due to the homebuyer tax credit. Brown expects the homebuilding market to continue to slow during the next few months.

• Metro Phoenix's median home price inched up to $130,000 in May, according to the Arizona Regional Multiple Listing Service's monthly report STAT. The median was $127,500 in April and was expected to top $128,000 in May. Based on pending sales, ARMLS projects the area's home prices will dip in the next few months and then climb again in September.

Phoenix-area foreclosure-home sales, houses taken back by lenders and resold, accounted for about 38 percent of all sales last month, ARMLS reported. The percentage of homes selling that are foreclosures has been below 50 percent for the past few months, which is helping home prices. A year ago, foreclosure homes accounted for about 62 percent of all Phoenix-area home sales.

Housing-market watchers are at odds over why foreclosure sales are dropping and foreclosures are again climbing.

Short sales, done by homeowners to avoid foreclosures, are up in metro Phoenix. But there is still concern lenders are holding on to foreclosure homes and could put too many on the market at once, again driving down home prices.

Housing market is mixed bag