Bank Owned

Here is a quick glance of the REO market in Greater Phoenix. Now inventory is the theme. Only 1 month of supply of bank owned homes, but that's been consistent for the last few months.

But, look at active, pending and sales prices per square foot. All are up.

It's quite an exciting time in the Phoenix real estate market. Good things are happening, despite the continued distress in the housing market and overall economy. There are some negatives to this turn in the market and we'll get into those, but they pale in comparison to what the market went through in the last half decade. 

This is now the year 2012 and it just keeps getting better. I know for many the financial and economic situations vary. In 2008/2009 when so few properties sold, it was hard to make ends meet and our reserves were depleted, the real estate portfolio value went down, even some properties were purchased a decade ago had no equity and the near future was bleak. Some people are still in hard times, but the important thing to remember

Notices of trustee sale and the subsequent trustee deeds continue to decline. The graph below is a clear illustration of the decline and increased interest from third parties. Below the this image is a link to the interactive graph. Expect this trend to continue in 2012, making is more difficult to purchase bank owned homes.

Check out the live interactive graph of trustee deeds in Phoenix.

November is usually exciting for other reasons than real estate: shopping, Thanksgiving and more shopping, yet there is some activity to take note of, as well get into below. 

New data show an 8.6% unemployment rate which is the lowest in the last 2 years. Seems like an improvement but, 315,000 people stopped looking for jobs, remain jobless yet they don't count toward the unemployment rate: maybe we need a modified unemployment rate which takes into account these people and underemployment.

People are buying more then deals on the latest plasma tv's, real estate is moving, supply keeps dwindling and guess what prices are moving up.

Active listings are at a paltry 26,655 at a time of the year when they should be higher. Last year we had a

Talk of Shadow inventory is still in the media and it often comes up in conversation with potential clients and those asking about the market, sometimes with a hint of glee. The reality is that there is very little shadow inventory, noted below as 'unlisted REO's'.

Pretty much all reo sub-segments are on a decline. The largest chunk in purple are properties with an active 'notice of trustee sale' or real estate going into foreclosure. Note that many of these are short sales and will sell as short sales before the auctioneer can scream. Others will pay off the loan or be modified. 

The pink is reo properties that are active on the market and green are pending reo's ready to close and already under contract.  Demand for REO properties is still

The Arizona Regional MLS is coming out with some nice data lately. It's about time, even though we have the venerable Cromford reports to rely on for well scrubbed data. The newest addition is a monthly report of distress in Greater Phoenix. Here is the intro from the ARMLS, "Gathering intelligence on Short Sales and Foreclosures is now easier with the Distressed Property Report. This report contains three interactive maps: short sales, foreclosures and a map of all distressed properties. Each map is a snapshot of the active distressed property aggregated by ZIP Code. Clicking a dot on the map will display more information. Each map is displayed below":  I like it visually.

The first map shows short sales. Notice where the concentrations are: on the

The success rate is an important measure. It gauges how many of the listings that exit the active market actually sell versus simply being taken of the market for multiple reasons,  amongst them failure to sell.

Below is chart showing the success rate of normal listings - normal meaning traditionally sold homes, i.e. not REO or short sale properties. Remember those? 

These are making a comeback in a big way. They are slowly replacing distressed properties which is a sign of a return to a normal market, one with only a small percentage of distressed properties. 

A higher success rate of normal homes means buyers are willing to buy these homes instead of bank owned and short sale homes. In order to do that they have to see value in this and

For anyone in the market right now it's very obvious that there are fewer bank owned homes to purchase and those left have just as many buyers pursuing them. As I noted in the October Phoenix housing review, the percentage of REO active properties has dropped to 10% from 19% last year and sales have dropped as well to 35% versus 48% last year.

At this point in the market there are really only 2,400 active REO residential properties with last month's sales at 2,623 that means inventory is less than a month. 

So it's no wonder prices are on the rise. Take a look at active price per square foot at $85.65 versus $78.64 last year and sales at $63.33 per square foot versus $59.21 last year.

Some still have concerns about shadow inventory. I say

While the weather may be cooling down the real estate market in Phoenix continues its hotness, yet the seasonal trend continues: supply increased, demand slowed and prices moved up.

7,436 residential properties sold in October which is awesome good compared to 6,520 last year. I would dismiss 2009 numbers or at least adjust them because there were heavy government incentives to buy at that time. 

Considering how difficult it is to find good homes I think achieving this number is actually amazing. Take away all the over priced homes or homes with unmotivated sellers and the inventory is truly much lower. Just because a home is on the market and even priced properly does not mean it's going to sell. Case in point: we've been trying to get into one

The zip code charts have been updated to include current data for active properties for each zip code in Greater Phoenix as well as sales per month, including September - the last full month and price per square foot all set in a one year chart for easy year on year comparison.

Additionally the chart includes notices of trustee sale, this is the number of notices of a pending foreclosure sale going out to owners in default and also the actual number of trustee sales or homes that sold at the auction, i.e. went into foreclosure. The Phoenix zip code charts are updated monthly and easily available via the market data section of this website.