Low home-resale volume in October may be further evidence that faith in homeownership has declined in the Phoenix area, according to one Arizona State University analyst.
Sales of existing detached single-family homes usually taper off when the mercury falls each year, said ASU associate professor of real estate Jay Butler, but a significant decline in activity from the previous October supports the theory that many would-be homebuyers have lost confidence, though perhaps temporarily, in the benefits of owning a house.
The decline is at least partly the result of misgivings about homeownership, mortgages, lenders and the way foreclosures are carried out, he said.
“We keep getting hit with things like procedural errors in foreclosure . . . basically just enhancing people’s disbelief in the system,” said Butler, of ASU’s W.P. Carey School of Business.
Maricopa County home-resale activity in October declined by about 24 percent compared with a year earlier, according to Butler’s most recent monthly housing report, issued Monday.
There were 4,695 existing-home sales recorded in October, the report said, down from 6,140 sales in October 2009. Resale volume also decreased slightly from September, in which 4,895 sales were recorded in the county.
The median sale price in October for existing homes remained steady from the previous month at $135,000, according to the report. It was down just slightly from the median price of $140,000 in October 2009.
Given the negative reports about some lenders’ rapid foreclosure-processing methods, a national moratorium on foreclosure resales by Bank of America, and a pessimistic outlook on employment, Butler said he expects the median home price to drop even further than he had anticipated previously.
“Hopefully better,” he said about the housing market’s near future, “but I’m not convinced.”
Foreclosure activity in October was down from the previous month, Butler’s report said. There were about 3,400 foreclosures recorded in October, compared with 4,100 in September and 3,800 in October 2009.
Butler said the decrease could be due to fewer high-end-home foreclosures, but he concluded that lenders simply were delaying some of them because of the weak demand for such homes.
Foreclosures continued to account for about two-thirds of all housing-market transactions, Butler said, split about equally between new foreclosures and the resale of recently foreclosed-on homes.
by J. Craig Anderson The Arizona Republic Nov. 15, 2010 04:42 PM