by J. Craig Anderson - Jun. 14, 2011 12:00 AM
The Arizona Republic
Foreclosure transactions have been a shrinking segment of the home-resale market for three consecutive months, according to an Arizona State University report on home-resale activity issued Monday.
Still, the report's author said the early-year decline in foreclosures was predictable, and that the true test of housing-market stability would come later in the year.
"This trend is not unusual in the early part of any year, with a typical pickup over the next few months," said Jay Butler, associate professor of real estate. "Things look good, but we've got to see how it's going to play out towards the end of the second and third quarter."
In May, foreclosures were about 35 percent of home-resale transactions in the Phoenix-area market, down from 36 percent in April and 38 percent in March. The foreclosure rate was higher - 43 percent - in both January and February, Butler said.
The median resale price for a detached, single-family home in Maricopa County in May was $125,000, the same as it had been in April and March, but down considerably from the May 2010 median resale price of $144,000.
There were 3,505 Phoenix-area foreclosure transactions completed in May, compared with 3,745 foreclosures in April and 3,230 foreclosures in May 2010.
There were 6,580 existing-home sales in May, the report said, compared with 6,520 sales in April and 6,430 sales in May 2010.
The decline in foreclosures is encouraging, Butler said, but a long-term trend won't take hold until the area's economic fundamentals improve - particularly the job market.
Butler also pointed to other sources of uncertainty in the market: talk of even tougher loan-qualification guidelines, lower limits on U.S. Federal Housing Administration-backed mortgages and higher down-payment requirements.
"While any decline (in foreclosures) is positive, fundamental uncertainty remains as to whether foreclosures will cease to be the dominant force in the market," he said.
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