by Peter Corbett – Apr. 14, 2010 09:51 AM
The Arizona Republic
Scottsdale home sales spiked in March to their highest level in nearly five years as short sales, foreclosures and fix-and-flip foreclosed properties boosted the market.
Home sales and foreclosures were up just under 80 percent from a year ago, according to the latest monthly report from Arizona State University Realty Studies.
Scottsdale’s median price of $370,000 was down 1.3 percent from March 2009 but it was one of the smallest declines in years.
The median price flattened out, but foreclosures and short sales brought down the average price per square foot, said Fletcher Wilcox, a Grand Canyon Title Agency vice president who analyzes the local housing market.
“Prices are going to be challenged in the upper end of the market,” Wilcox said, adding that the sale of larger homes pulled up the median price in Scottsdale in March.
Foreclosures accounted for 28 percent of the March home deals in Scottsdale, according to the ASU report. The foreclosure rate is 40 percent Valley-wide.
The Valley’s median price in March for traditional sales was $142,500, up 12 percent.
Scottsdale home sales have not been this high since September 2005 when 660 properties were sold. The median price then was $540,000.
Wilcox and Scottsdale Realtor Gary Holloway of Zip Realty said that a growing segment of the market was from foreclosed homes that investors bought, refurbished and then quickly sold for a modest profit.
“They’re picking them up so cheap . . . and they can make 10 percent to 15 or 20 percent,” Wilcox said.
Holloway said buyers often snap up the fix-and-flip homes after seeing foreclosed homes that have been trashed by delinquent buyers.
“There is kind of a frenzy” for some of the lower-priced fix-and-flip homes with multiple offers above the asking price, he said.
Holloway says there are still a lot of problems with lenders dragging their feet on approving short sales.
Still, deals are getting done. About 15 percent of the single-family homes sold in Scottsdale in March were short sales, Wilcox said.
His analysis of the Multiple Listing Service data also showed that there is less than a four-month supply of Scottsdale homes priced below $400,000. It jumps to more than five months for homes priced from $400,000 to $600,000.
A six-month supply of homes is generally considered a balanced market.
In Scottsdale, there is a 16-month supply of homes costing $700,000 to $800,000 and $1 million to $2 million.
“Larger homes are stuck on the market, and the price is going to come down,” Wilcox said, adding that sellers are discouraged.
Buyers, meanwhile, are nervous and confused by the market, Holloway said.
“They’re afraid,” he said. “They don’t want to be like all the people they read about who got hurt before.”
And on the other side of it, “everybody wants to be able to brag” that they got a great deal, Holloway said.
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