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.
In addition, today a smaller%age of sales occurs below $100,000. Last month 30.6% of homes sold for less than $100,000, compared with 35.6% a year earlier. The combination of lower prices, lower mortgage rates and a soon-to-expire federal tax credit has stoked more sales in mid-to higher-priced neighborhoods, which also puts upward pressure on the median, which is the point where half of the homes sold for more and half for less.
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.