Metro Phoenix foreclosures selling 5% above asking price—August 2009

Metro Phoenix foreclosures sold 5% above asking price in August 2009. 

• 5,537 Metro Phoenix foreclosures sold in August 2009
• The asking price of those Phoenix foreclosures was an average of $139,547
• The average selling price was $146,402 – a 5% increase

The reason: the supply of Phoenix foreclosures dwindled by 50% over the last six months.  There were almost 22,000 Metro Phoenix foreclosures on the market to begin 2009.  There are currently fewer than 12,000 Phoenix foreclosures on the market.  However, the demand for Phoenix foreclosures during the same period (expressed as sales) has remained relatively constant at an average of 6,000 sales per month. Phoenix foreclosures are defined as bank owned properties  and short sales.
Metro Phoenix foreclosures have accounted for an average of 70% of total sales since the beginning of 2009. Those sales had been driving down the price of homes until April-May of 2009. The decreased supply of Phoenix foreclosures caused multiple offers and even more bidding for Metro Phoenix foreclosures.  Banks learned that they no longer had to lower asking prices because of demand.  This has led to Metro Phoenix foreclosures selling 5% above asking price in August 2009.
If you are considering Metro Phoenix foreclosures did you miss the “bottom” of the market? That’s the million-dollar question. At first glance you might say yes because prices for Phoenix foreclosures have increased over the last four months. However, many industry sources believe there will be many more Metro Phoenix foreclosures on the market to finish out 2009.
The big question is: how will the banks handle the accumulated inventory of Phoenix foreclosures?  My sources claim many banks are holding inventory and releasing them at a slower pace to keep up demand for Phoenix foreclosures.  Additionally, I know a property management company that just received a contract to rent 200 Metro Phoenix foreclosures. This particular bank has decided to turn the huge losses incurred by selling Phoenix foreclosures into cash flow. Their hope is to wait until the market rebounds.
Prices at 10 year lows make this a great time to consider Metro Phoenix foreclosures.
ValleyWideHomes.com
ForeclosureExpert.info
Ron Wilczek
480-445-9480