Arizona Real Estate Market

Activity in the Phoenix real estate market dropped in October – a dynamic as seasonal as the cooling temperatures, because in most years sales slow as the holidays approach. A decline in foreclosures was responsible for part of the overall slowing, according to the report authored by W. P. Carey Professor Emeritus Jay Butler. Foreclosures represented 26 percent of recorded resale activity in October - the lowest percentage since April 2009.

Sales activity in the Phoenix real estate market slowed significantly between August and September -- largely due to a drop in foreclosure activity -- according to the monthly housing report issued by the W. P. Carey School of Business. Professor Emeritus Jay Butler, who has been analyzing this data for more than 30 years, explains the dynamics of the market that caused the drop.

Good news and bad news from the Phoenix real estate market this month. In August, the absolute number of foreclosures was down compared to a year ago – that’s the good news. But the percentage of the market represented by foreclosures is up -- that's the bad news. W. P. Carey Professor Emeritus Jay Butler explains that even though there were fewer foreclosures in August, there were also fewer traditional sales. And median price is down -- the result of investors snapping up foreclosed properties at low prices. Another twist: Butler reports that ads for investment seminars are starting to appear, leading to speculation that amateurs are in the market once more. Here’s his take on the August numbers.

As analysts debate the possibility of a double dip in Gross Domestic Product (GDP), many would argue that the economy cannot move into a sustainable recovery without improvement in housing. But as of now, single family housing permits are down in 49 of 50 states compared to last year, and permits are on track for a double digit annual decline. If this happens, 2011 will become the weakest year on record for single family housing permits.

In his latest Realty Studies Report, Jay Butler, associate professor of real estate at the W. P. Carey School, finds that 46 percent of the home transactions recorded in Phoenix in September were foreclosures — the highest percentage level of foreclosure activity since March. If you take into consideration the previously-foreclosed properties that changed hands in September, foreclosure-related activity actually represented 67 percent of the market. Several large banks, including Bank of America, JPMorgan Chase & Co. and Wells Fargo & Co. have temporarily halted foreclosures due to questions about documentation. The problem first came to light in the 23 states where foreclosure is a judicial, and therefore public, process. Knowledge asked Butler what the implications are for Arizona, which is one of 27 states where foreclosure is not a judicial process.