Prescott, AZ

Activity in the distressed home market in the Prescott AZ area remains moderate with 18 homes closing in the first 15 days of May. This compares to 42 homes sold by traditional resales during the same period.

The average price per square foot for REO and short sales was $98 and the average time to sell was 115 days compared to $138 per square foot and 239 days on market for tradional resales. You can see that the REO and short sales market in Prescott and Prescott Valley continues to move quicker and at a much lower average price.

Short sales about 20% of sales: of the 19 homes sold, 4 were short sales (highlighted in yellow).

Over 1/4 of the homes sold for more than asking price (see green highlight), sold fairly quickly, and got multiple offers to get there. This tells me that multiple buyers are getting in the game. Before you enter the fray, please read: Top 10 tips to win the REO multiple offer game.

See chart here.

For more information on any of these listings, please contact me.

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Related Posts:

• 40% of condos sold in March 2009 in Prescott area were REOs
• Prescott area foreclosed/REO homes sold in last 15 days > 03-11-09
• Prescott area REO and short sale homes sold in last 15 days > 03-26-09
• Prescott area REO and short sale homes sold 4-15-09 to 4-30-09
• Prescott area REO and short sale homes sold 4-1-09 - 4-15-09

The Wall Street Journal said that ZipRealty reported this week healthy year over year sales increases and signs that prices were leveling off for the Phoenix metro area.

ZipRealty reported that Phoenix led the nation in the change in the number of homes listed for sale at the end of April compared with a month earlier with a drop of almost 15%.

"Banks have sped up the process for getting foreclosed homes on the market, and continue to lower prices to sell them," said Leslie Tyler, vice president and chief home hunter for ZipRealty. "The drop in days on market versus last year highlights that distressed properties in these hard hit markets are starting to move, which is a hopeful sign." "In markets where prices have fallen the most, such as many California cities, Phoenix and Las Vegas, we continue to see strong buyer interest," said Tyler. "The market is being driven right now by first time buyers and investors because of the affordability in these areas."

See WSJ article with additional graphs and more detail

The number of homes listed for sale in many U.S. cities continued to decline in April in what some analysts see as a sign that the market may be nearing a bottom. Other analysts are looking at a new round of foreclosures to hit the market soon and are cautious to say we are at the bottom. I'm personally on the cautious side and expect prices to struggle in some local markets and rise in others depending on the number of foreclosures hitting the market. Prescott should see bottom fairly quickly, while I expect some areas of Prescott Valley and Chino Valley that have high percentages of foreclosures will continue to see price pressure.

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The Wall Street Journal recently ran a couple of articles on the unforseen impacts that short sales can have on homeowners who use short sales to avoid foreclosure. Many Prescott and Prescott Valley homeowners facing foreclosure are under the impression that there are no consequences when the bank "agrees' to a short sale.

Sadly, this is not always the case. Here's an excerpt:

Some homeowners are finding that when they sell their homes for less than the outstanding mortgages -- a so-called short sale -- their mortgage companies are going after them for some or all of the difference. Mortgage companies are also sometimes taking legal action to recover unpaid amounts after a foreclosure is completed.

In a growing number of cases, holders of mortgages or home-equity loans are requiring borrowers in short sales to sign a promissory note, which is a written promise to pay back a loan or debt. Real-estate agents and attorneys say they have seen an increase in requests for promissory notes as mortgage companies look to short sales as an alternative to foreclosure.

In many states, lenders have always had the right to pursue former homeowners for unpaid mortgage debt. Yet until recently, most borrowers who ran into trouble were able to refinance or sell their homes and pay off their loans. Now, falling home prices are widening the gap between home values and mortgage balances, and the number of homeowners who can't make their mortgage payments is rising as the economy has weakened. More than 3.8 million homes will be lost in 2009 and 2010 because borrowers can't make their mortgage payments, according to forecasts from Moody's Economy.com.

Mortgage companies are sometimes going after unpaid debt after a short sale or foreclosure.

Here are some factors they may consider:

How big was the unpaid debt?

Was the property purchased as an investment?

What are the borrower's assets and income?

What is the policy of the investor or mortgage insurer?

Read the full article here.

It's true that in Arizona your primary residence is USUALLY subject to the anti-defficiency statutes, but there are exceptions. Bottom line: before you call an agent who specializes in short sales, call your CPA and spend the $150 to find out if a short sale will leave you shorter than your think.

See this post: Common questions about short sale tax consequences

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Twelve new foreclosed or short sale homes came on the market last week, about one in every 10 homes being listed in the Prescott Arizona Area MLS system, and one third of the closings were distressed sales in Prescott, Prescott Valley, Chino Valley, Dewey-Humboldt and the outlying areas of Yavapai County. Foreclosure activity was up again on the pending and sales side, but went down as a percentage of new listings.

The difference between what newly listed traditional homes and Prescott foreclosed/REO and short sale properties per square foot remains large at a 42% discount.

A bit of an anomaly this week is the fact that distressed homes took 5% longer than traditional sales. This is great news! We'll see what happens next week.

Want to see what the latest sales figures are? See: Prescott area REO and short sale homes sold 4-15-09 to 4-30-09

The percentage of foreclosed/REO/short sale new listings on market decreased from 14% to 10% this week. Last week 64% of the pending sales were REO or short sales, and this week they made up 42% of the deals going into escrow. The percentage of REO/short sales that closed last week went from 19% to 36% this week. REO/short sales sold about 5% slower than traditional resales.

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On April 28th, 2009, RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, and Enormo (http://www.enormo.com/), a leading global real estate portal, announced a strategic alliance that will give Enormo's international user base of potential homebuyers and investors unique access to RealtyTrac's database of U.S. foreclosures including Prescott, Prescott Valley, Chino Valley and Dewey-Humboldt.

RealtyTrac's foreclosure listings are integrated into Enormo's search functionality, allowing buyers to search more than 1 million foreclosure properties from 2,200 U.S. counties. As RealtyTrac's first-ever international partnership, the alliance will allow the company to accept international subscriptions to its service thanks to Enormo's translation of RealtyTrac's data into its 31 interface languages.

"Foreclosure inventories around the United States are at historically high levels, and interest in purchasing those properties has been growing steadily from buyers and investors outside of the U.S.," said RealtyTrac Senior Vice President Rick Sharga. "This alliance with Enormo provides global exposure for RealtyTrac's foreclosure data, and gives Enormo a comprehensive list of U.S. foreclosure properties to add to its vast menu of property listings."

The foreclosure property search feature on Enormo allows buyers to view Prescott area properties in all three stages of the foreclosure process - pre-foreclosure, auction and bank-owned (known as REOs). At the same time it allows real estate professionals who work with Enormo a chance to offer a greater selection of properties for would-be home buyers and investors as they navigate this complex area of real estate.

"The timing is perfect for Enormo to partner with RealtyTrac - the strength of other currencies against the dollar combined with the great value of U.S. housing stock is driving interest from new investors who want a piece of the foreclosure action," said Enormo CEO Yannick Laclau. "With the addition of these 1 million listings from RealtyTrac, Enormo gives its users unique access to great value properties, and cements its position as the number one website for international real estate."

To see the whole press release, click here.

About RealtyTrac Inc.

RealtyTrac RealtyTrac.com, is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data.

To search for foreclosures nationwide

To search for foreclosures in the Prescott Arizona area