Residential Lender Owned Property Market in Greater Phoenix

December 04, 2009

Bank owned homes and condos housing market overview with November 2009 data, the previous months and a comparison to 2008.

lender owned home sales

(graph: The Cromford Report)

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There are still plenty of bank owned homes out there and they are not going anywhere for a while. There is a good supply in the pipeline that will continue to feed the demon of this market. While slightly up over the last two months the supply is down to 5,141 from 12,984 last year. That is definitely an improvement. This is good for the market.

We will not have any sense of stability until we are rid of this plaque. It has spread around to all facets of the transaction, bringing out some of new awkward, unusual, and un-ethical behavior in all parties involved.

In November 3,275 and in October 3,581 bank owned properties sold. This is actually about 70% more then last year but slightly less then 4,322 in September.

Overall a lot of the inventory is junk and the good stuff goes fast with multiple offers on it, and prices often exceeding the asking price by 20-50%.

I think there are a few things at play. The lender owned homes have an aura of a good deal drawing in much demand and often they are under priced for the market. With this combination the demand rises. In the last few months the average sold price was over the list price. That's flat at about 100% in November but only because the junk is being picked up at lower prices, often for fix and flip projects.

For buyers it's important to realize that when your buying in the market it is market price. With so much demand the prices are quickly level out to market and just because it is a bank owned home does not mean your getting it below market price.