The foreclosure rate in the Phoenix-area housing market is dropping, with none of the shadow inventory (from anticipated foreclosures) in the wings, according to the latest report from Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. Investors are still driving the market, as the ordinary homebuyer who needs to secure mortgage funding from a bank can’t compete with investors’ all-cash offers — and in frustration, many homebuyers are turning to new-home sales and construction. This has fueled a 39-percent increase in new-home sales from June 2011 to June 2012. Permits for single-family-home construction were up 49 percent over last June.
Property sale just closed in August on Chandler’s Pastorino Dairy, which was purchased by JEN Partners, a New York private equity firm, for $2.3 million, on which Arizona-based Maracay Homes will develop a new, 74-home community, Vaquero Ranch. Reporting a strong second quarter for home closings and closing revenue nationwide, Scottsdale-based Meritage Homes showed Arizona achieved a 61 percent increase in orders despite slightly fewer communities open in 2012. And Phoenix-based City Property Management recently announced it has added five more Arizona home-owners associations to its client base, four of them new construction.
Although Orr’s report cites a 15.7-percent drop in sales of single-family homes in the Phoenix area from June 2011 to June 2012, it credits the decrease to the fact that fewer foreclosed homes were coming on the market. Homes.com’s most recent “State of the Home Buying Market” report, an industry standard for obtaining a pulse on the state of the housing market, cites a 49-percent increase in Phoenix property inquiries from the beginning of this year to August.