PHOENIX ( -- Sales of existing houses and condos in the Phoenix area rose in June to the highest level for that month in four years, with the non-foreclosure market continuing to account for a greater portion of sales. The modest shift away from lower-cost lender repossessions enabled the overall median sale price to edge higher than the prior month for the second month in a row, a real estate information service reported.

In June, 60.8% of the Phoenix-area houses and condos that resold had been foreclosed on in the prior 12 months, down from 64% in May and the lowest since such foreclosure resales were 58.6% of all resales last November. Foreclosure resales hit a high of 66.2% this March, according to MDA DataQuick. The San Diego firm tracks real estate trends nationally via public property records.

A total of 10,731 new and resale houses and condos closed escrow in the combined Maricopa-Pinal counties metropolitan area in June, up 12.2% from May and up 40.4% from a year ago. Total home sales have risen on a year-over-year basis for six consecutive months. However, sales of existing (not new) houses and condos combined have risen on a year-over-year basis for 12 consecutive months, and the June resale total of 9,720 was the highest for any month since March 2006.

Last month's year-over-year gains in house and condo resales offset a 50% annual decline in sales of newly constructed homes. The 1,011 new homes that builders sold last month marked the lowest new-home tally for a June in more than a decade.

The median price paid last month for all new and resale houses and condos combined was $130,000, up 0.4% from May but down 36.6% from a year ago. The tiny month-to-month gain was the second in a row. May's 3.5% increase over April's median marked the first such month-to-month rise since the overall median rose 1%, to $256,000, in March 2007.

June's $130,000 overall median was 50.8% below the Phoenix area's peak $264,100 median reached in June 2006. The median has fallen on a year-over-year basis for 29 consecutive months.

An alternative price gauge analysts watch shows a sharper decline from the market's 2006 price peak but has also shown a flattening and upward trend in recent months: The median paid per square foot for existing single-family (detached) houses rose to $67 in June, up a tad from $64 in both April and May, but down 40.9% from a year ago and down 60.8% from a peak $171 in June 2006.

In the Phoenix region and elsewhere in the West, various median sale price measures have flattened or begun to rise mildly in concert with a decline in the portion of resales that were foreclosures, which tend to sell at a discount. Another factor putting upward pressure on the median: the normal spring-summer increase in the number of people purchasing homes not just because they perceive them as a great deal - a "bargain" - but because they need to move for a new job, more space or to re-situate the family before school restarts.

Over the past year, and especially over the winter, stronger home sales across much of the West have been driven mainly by bargain hunters. Most are first-time buyers and investors choosing either foreclosure resales or other lower-cost homes in neighborhoods rife with distress. Last month about 45% of all Phoenix-area buyers used government-insured FHA loans, a popular choice among first-time buyers, according to an analysis of public property records. Absentee buyers made up 39.6% of all purchases - a relatively high%age in the West. Absentee buyers include investors, mainly, as well as others who will have their property tax bills go to an address other than the one for the home they just purchased.

For the foreseeable future, the Phoenix region will continue to have many foreclosures to recycle, and that inventory of lender-owned property will weigh on home prices. In June, lender repossessions spiked: Nearly 5,800 houses and condos were lost to foreclosure in the two-county Phoenix region, up nearly 38% from May and up 40.8% from a year ago. It was the highest monthly total since foreclosures began to surge in 2006. The figures are based on the number of trustees deeds filed with the county recorder's office. The document signals that a home was lost to foreclosure.

Across the West, year-over-year declines in the median sale price - the point where half of the homes sold for more and half for less - have sometimes overstated the extent to which the value of the typical home has fallen. It's because the median is being tugged lower not just by price depreciation but by shifts in the types of homes selling. For example, compared with past years more of today's sales involve foreclosures, which tend to sell at a discount and be concentrated in more affordable areas. Also, the August 2007 credit crunch made larger "jumbo" mortgages more expensive and harder to obtain, which has led to sluggish sales - in some cases the lowest in many years - in higher-priced neighborhoods. (A drop off in high-end sales can pull down the median.)