Sales rebounded in 2011 enthusiastically, topping out at 101,436, the second highest total sales of the decade. It was surpassed only by 2005 with 104,725 sales, at the height of the real estate bubble. (We use late mid 2002 and 2003 to mid 2004 as our last normal markets before the big bubble.)
Foreclosures pending, which fuel the Valley’s foreclosure sales, reached their pinnacle in November 2009 at 50,568, and finished 2011 at 19,979, 60.49% below the decade high. The average foreclosures pending per year stubbornly held at 44,237 and 44,698 for 2009 and 2010. In 2011 it took an abrupt downward turn all year.
Distressed properties as a percent of sales started the year at 70.2%. Despite a series of hiccups in direction over the course of 2011, it crashed through the 60% barrier the last two months of the year, at 59.4% and 59.8% respectively. Not only did the percent drop 10.4% over 2011, but the short sale to foreclosure mix shifted by year end, to see short sales overtake foreclosures for the first time.
Pricing cannot correct itself until the forces of supply and demand equalize. Both List and Sales pricing are currently unduly influenced by the large numbers of distressed properties that compete for buyers. The slowing of foreclosures pending, if continued at the current rate, should stabilize in 2012, leading to a gradual decline to normal levels of foreclosures in the active property pool. Likewise, growing lender appetite for short sales over foreclosure will also diminish foreclosure influence on pricing. National predictions on home prices are a slow but steady upward climb in 2012. Given 2011’s underpinning metrics, the Valley's pricing is poised to gain traction in 2012.
All in all, it was a pretty good year for the Valley housing market and should only get better!
Sources: Arizona Regional Multiple Listing Service; Cromford Report
