31% of Phoenix area home sales are foreclosures in March down from 51% in Feb

More good news for the Prescott, AZ market which relys so much on the Phoenix market for spillover business: a sign that foreclosure sales have peaked in the greater Phoenix area!  That's the news from the Morrison School of Management and Agribusiness at Arizona State University's Polytechnic campus today regarding the decline in the rates of foreclosure sales in the Greater Phoenix area.

Investors are starting to come into the market again buying rental homes and income  with the expectation that prices will rise in the next few years.  That, and the fact that interest rates are low and 1st time buyers are finding prices that allow them to buy for what they are paying for rent. 

Here's an excerpt:

The declining prices have piqued interest for potential investors and owner-occupants, especially in the lower income ranges. For the traditional market, the median price in March was $127,000, down 45 percent from the $229,900 for a year ago. Foreclosed properties had a median price of $146,880 ($189,170 for March 2008).

Investment interest is being driven by the anticipation that home prices will rise again in the next few years. According to Butler, there are two fundamental reasons why the median price for foreclosed homes is higher than traditional transactions.

"The first reason is more expensive homes continue to be foreclosed, with 15 in March, three over $2 million, and 7 percent of the foreclosures were in the $300,000 range," he said. "The other reason is that, for the last year, slightly more than 30 percent of the traditional sales were foreclosed homes that were sold again with a median price markdown of 15 percent. The markdown varied throughout the Valley ranging from 44 percent in Maryvale to 17 percent in Avondale to 10 percent in Tempe."

Click for the full report that has details by Phoenix area neighborhood.

This is similar to the Prescott and Precott Valley markets where foreclosures made up 34% of sales in the 1st quarter.  It will be interesting to see where they end up in Q2.   For more information see: Prescott Arizona area foreclosure market report for Q1 2009.

To search for foreclosured, REOs, and short sales in Prescott, Prescott Valley, Chino Valley, or Dewey-Humboldt, click here.