Phoenix Region October Home Sales

Phoenix-area home sales were higher than a year earlier for the sixth month in a row in October. Sub-$100,000 deals rose 22 percent year-over-year, mid-market activity fell slightly and high-end sales posted a modest gain. Home price indicators were mixed, while the share of sales to absentee buyers rose and the portion involving distressed properties edged lower, a real estate information service reported. 

A total of 8,051 new and resale houses and condos closed escrow during October in the combined Maricopa-Pinal counties metro area. That was down 7.0 percent from the month before but up 15.2 percent from a year earlier, according to San Diego-based DataQuick, which tracks real estate trends nationally via public property records.

Phoenix-area sales usually don’t change much between September and October. On average, the difference between those two months has been just 0.8 percent since 1994, when DataQuick’s complete Phoenix region statistics begin.

Total October home sales fell 13.5 percent short of the average number sold in October since 1994, but that was only because new-home sales remained extremely low. Resale volume has fared much better: The number of houses and condos that resold in October – 7,382 – was 5.5 percent above the October average and was the highest for that month since October 2009, when 7,960 homes resold. 

Once again, the highest sales gains came in the lowest price ranges. The number of homes selling for less than $100,000 rose 21.9 percent year-over-year, while sales between $100,000 and $200,000 increased 12.9 percent. Deals in the $200,000 to $600,000 range fell 0.7 percent from a year earlier, while above $800,000 sales increased 6.6 percent.

Among the Phoenix region’s larger communities, the biggest annual gains in existing single-family house sales in October occurred in Casa Grande (up 54.8 percent from a year earlier); Glendale (up 14.3 percent); Laveen (up 26.3 percent);  Maricopa (up 19.2 percent); Mesa (up 22.9 percent); Phoenix (up 26.4 percent); Queen Creek (up 25.0 percent); Scottsdale (up 16.9 percent); Surprise (up 17.3 percent); and Tempe (up 66.2 percent).

Of those larger communities with year-over-year sales increases, Scottsdale had the highest median resale house price in October, at $335,000, which was 8.1 percent lower than a year earlier. All of the other communities listed above had medians below $155,000, and only one of them, Maricopa, saw its median rise year-over-year. Maricopa’s $94,000 October median was up 4.6 percent from a year ago. 

Across the two-county region, 265 buyers, representing 3.3 percent of all October purchases, had a foreign mailing address listed in public property records. It is unclear how many more sales there were to foreign buyers who used a domestic mailing address. Of the foreign buyers who could be identified, most – 89.3 percent – were from Canada.

October’s foreign buyers paid a median $115,000 for resale houses, which made up about 70 percent of their purchases. They paid a median $87,900 for resale condos, representing about 20 percent of their purchases, and $250,301 for newly built homes, which accounted for 10 percent of the purchases. The highest price paid by one of the identified foreign buyers was $1,050,000 for a 3,500-square-foot Scottsdale home situated on just over an acre.

Among all buyers, the median price paid in October for all new and resale houses and condos sold in the Phoenix region was $120,000. That was down 3.6 percent from September and down 6.8 percent from a year earlier. The median has changed little this year, ranging from a low of $118,347 in August to a high of $124,500 in September.

October’s median stood 54.6 percent below the all-time peak of $264,100 in June 2006.

Another key price gauge analysts watch, the median price paid per square foot for existing single-family detached houses, rose in October to $69, up from $67 the month before but down 1.4 percent from a year earlier. It was the lowest annual decline since September 2010. October marked the 14^th consecutive month in which the median paid per square foot fell year-over-year. The October figure was 59.6 percent below the $171 peak median price paid per square foot in May and June of 2006. 

At the county level in October, the median price paid per square foot for resale single-family detached houses in Maricopa County was $70, the same as in September but down 5.3 percent from a year earlier. The Maricopa County median price per square foot has changed little during the first 10 months of this year, ranging from $68 to $70. The Pinal County median paid per square foot was $49 in October, up from $47 in September and up 6.2 percent from a year earlier – the first year-over-year gain since June 2010. The Pinal County figure hasn’t changed much this year, either, ranging from $44 to $49. 

Absentee buyers, who include investors and vacation-home buyers, bought 44.0 percent of all Phoenix-area homes sold in October, up from 42.6 percent in September and 42.7 percent a year earlier. Absentee purchases peaked for the current real estate cycle at 47.1 percent in March this year. In October, absentee buyers paid a median $100,000, the same as in September but down from $105,000 a year ago.  

Cash buyers represented 39.7 percent of all sales in October – the lowest level since October last year, when the figure was 39.5 percent. The October 2011 figure was down insignificantly from 39.8 percent in September. The record for cash buying was 48.0 percent in February this year. October's cash buyers paid a median $88,500, up from $88,000 for both the month before and a year earlier. Specifically, these were transactions where there was no indication of a purchase loan recorded at the time of sale.

Many cash and investor buyers target distressed properties. In October, distressed sales represented 59.2 percent of all resale activity – the lowest level for any month since the figure was 57.7 percent in August 2008. Distressed sales are made up of lender sales of foreclosed properties, as well as “short sales,” where the sale price falls short of what was owed on the property.  

Foreclosure resales, defined as homes that had been foreclosed on in the prior 12 months, accounted for 43.0 percent of October resales – the lowest level since June 2008. October’s figure was down from 44.4 percent in September and 53.9 percent a year earlier. The peak level for foreclosure resales was 66.2 percent in March 2009.

Short sales represented an estimated 16.2 percent of October’s resale activity, down from 16.8 percent in September, but up from an estimated 15.0 percent a year ago and 14.2 percent two years ago.

Lenders foreclosed on 2,845 Phoenix-area homes in October, the lowest number since March 2008. The October figure fell 9.7 percent from September and fell 39.0 percent from a year earlier. During the first 10 months of this year, lenders foreclosed on 45,628 Phoenix-area homes, down 13.1 percent from the same period last year. The figures are based on the number of Trustees Deeds filed with county recorder offices. The document signals that a home was lost to foreclose.

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