Activity in the Phoenix real estate market dropped between June and July, during the summer season when sales are usually up. The reason is that foreclosure-related activity fell once again – dropping below 30 percent for the first time since 2009. W. P. Carey School of Business Professor Emeritus Jay Butler, who has been watching Phoenix resale data for more than 30 years, says there’s small comfort in that number. Until economic conditions improve, consumer confidence will remain low, and the market will be slow to return to what used to be a normal dynamic.

The summer resale season in the Phoenix real estate market has been brisk, with about 10,500 single-family homes changing hands in June. And, for the fourth consecutive month, foreclosure-related sales as a percentage of the total market have fallen. But W. P. Carey Professor Emeritus Jay Butler cautions that it’s still too soon to assume that this positive trend will continue. And even though the median price is holding, it may fluctuate down as recovery proceeds. Butler said that a rise in prices may trigger a wave of re-sales as owners and investors attempt to turn a profit on the foreclosed properties they have acquired. That bump in supply could push prices lower. These dynamics and more make Phoenix real estate not one story, but many.  

The volume of home sales in May in the Phoenix market was about on par with the rest of this spring’s resale season, although the percentage represented by foreclosures continued a modest decline. But whether this portends better things to come is yet to be seen, according to the W. P. Carey School’s real estate expert Jay Butler. Meantime, the absence of move-up buyers continues to dampen prices, with the median price in May coming in at $129,000. This is on level with April, but notably down from the $144,000 of a year ago. Investors smelling a deal also pushed the foreclosure median price down, to about $136,000, compared to almost $149,000 in May 2010. In a recent talk with Knowledge@W. P. Carey, Butler discussed the numbers and what they mean in context.

The traditional spring resale season is in full swing in the Phoenix market, with 10,265 homes recorded sold in April. That’s about 900 fewer than March, but level with April 2010. Foreclosures, including the sales of previously foreclosed homes, were a whopping 62 percent of total transactions in April. The numbers paint a cloudy picture of a market still suffering from the aftershocks of the real estate collapse, but the image shifts depending on which component you examine. Jay Butler, associate professor of real estate at the W. P. Carey School, talked with Knowledge@W. P. Carey about value — a different element than price — and what that large number of foreclosed homeowners mean for the future of the Phoenix market.

In the Phoenix real estate market, the traditional resale season begins in March, and as expected, the number of transactions last month rose to more than 11,000, up from about 8500 in February. And happily, foreclosure activity as a percentage of total transactions was down to 38 percent after climbing above 40 percent for two months. But Jay Butler, associate professor of real estate at the W. P. Carey School, says it’s uncertain whether that increase in transactions and drop in foreclosure activity is the beginning of a new trend, or if the market will return to February levels. In truth, the Phoenix market is still a series of bumpy hills. Butler explains.