There are multiple reasons for recent year-over-year gains in various median sale prices. While the increases do indicate widening price stability, they also reflect significant changes in the types of homes selling this year compared with last. For example, there has been a substantial decline in foreclosure resales. Last month they represented 51.5% of the resale market, compared with 66.2% a year ago. In the past, foreclosed properties tended to sell at a discount and were located in some of the most affordable areas. Over the past year lenders have increasingly steered distressed borrowers into foreclosures alternative such as short sales and loan modifications.It's no surprise the median sale price didn't budge between February and March: Foreclosure resales held steady, and there was little change, month-to-month, in the distribution of sales across the home price spectrum. For example, last month 28.4% of sales were over $200,000, compared with 28.0% in February. Moreover, the%age of sales that were resale houses, resale condos and newly built homes changed little last month compared with February. Where prices head from here depends largely on the economy's ability to create jobs, as well as on the magnitude and timing of future foreclosures and the market's response to waning government stimulus. Last month a total of 9,626 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area, up 41.1% from the month before and up 16.0% from a year earlier. A rise in sales between February and March is normal for the season, with that gain averaging 29.0% since 1994, when DataQuick's complete Phoenix-area statistics begin. March's total sales were the highest for that month since March 2007, when 10,712 homes sold. Total resales - houses and condos combined - were the highest for a March since 2006.Existing (not new) condo sales saw the biggest annual gain last month, rising 117.3% from a year ago. In March, condos were 12.4% of total sales, compared with 6.6% a year ago. The number of newly built homes sold in March rose 40.7% compared with February but fell 5.0% from a year ago to the lowest level for a March in more than a decade. Builders continue to struggle to compete with low-cost foreclosures and other distressed sales. Much of the housing demand still comes from investors and first-time buyers. In March, 45.6% of all Phoenix-area home purchase loans were government-insured FHA mortgages, a popular choice for first-time buyers, according to an analysis of public property records. Absentee buyers purchased 39.8% of all homes sold in March, down from 41.2% in February, and paid a median $118,000 last month. Absentee buyers are mainly investors, but include second-home buyers and others who indicate at the time of sale that the property tax bill will go to a different address. Buyers who appear to have used cash to purchase their homes accounted for 39.7% of all March sales, down from 43.6% in February. Last month's cash buyers paid a median of $109,000. Specifically, these were transactions where there was no indication of a purchase loan recorded at the time of sale. Some of these "cash" buyers could have used alternative financing arrangements outside of a typical, recorded purchase mortgage, and in some cases these buyers might be taking out mortgages after their purchases. All-cash deals have become popular in many Western markets where prices have dropped sharply, luring investor buyers who don't always qualify for traditional mortgages. Moreover, sellers favor the relative speed and certainty of all-cash transactions. Last month about 3.5% of all homes sold had been "flipped," meaning they had previously been sold on the open market between three weeks to six months prior. A year ago it was 1.4%. Foreclosure activity rose in March: The 5,962 single-family house and condo units foreclosed on in the region represented a 28.6% increase from February and a 52.1% gain from a year earlier. For the first quarter (January through March) of this year, the number of housing units lost to foreclosure fell 2.4% from fourth quarter 2009 but rose 7.8% from first quarter 2009. The foreclosure figures are based on the number of trustees deeds filed with county recorder offices. The document signals that a home was lost to foreclosure. The foreclosure totals can include units that the county assessor has designated as condos, but are currently used as apartments (e.g. a 100-unit complex designated as condos but used as apartments could be foreclosed on and those units would be reflected in the foreclosure total for that month). For this reason and others, the number of foreclosure filings has seesawed month-to-month over the past year, and a single month's increase or decline doesn't necessarily indicate the beginning of a lasting trend.
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