Short sales dominate home sales in EV - East Valley Tribune: Business

Short sales dominate home sales in EV

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Posted: Tuesday, April 17, 2012 10:33 am | Updated: 10:53 pm, Thu Apr 19, 2012.

The number of distressed homes sold in the East Valley fell in March, but short sales dominate much of the real estate market.

Mesa leads the Valley in distressed home sales, with 919 in March. The East Valley’s four largest cities had 2,355 distressed sales in March, according to the Arizona Regional Multiple Listing Service. That’s down 17.4 percent from 2,765 in February for Chandler, Gilbert, Mesa and Tempe.

Mesa is not alone in having a large percent of sales comprising of foreclosures or short sales, according ARMLS data.

Up to 70 percent or 80 percent of transactions consisted of distressed homes in many East Valley zip codes. That includes 80 percent in Chandler’s 85225, 81 percent in Mesa’s 85201 and 82 percent in Gilbert’s 85233.

Distressed properties continue to drive the market across many parts of the Valley, said Chris Heagerty, the ARMLS communications director. Home values affect which areas are hit the hardest.

“Lower priced neighborhoods tend to bear the greater brunt of the distress over higher priced areas,” she said in an email.

Distressed properties are a smaller problem in a few areas, such as north Mesa’s 85215. There, 24 percent of sales are distressed homes.

And just 6 percent of all sales there are foreclosures.

Many East Valley neighborhoods share foreclosure activity that represents a single-digit percentage.

That is the opposite from the early stage of when the Valley’s real estate market tanked.

While foreclosures once dominated the market, short sales are now far more common.

In a short sale, the lender forgives some of the debt because the seller doesn’t have enough equity in the property to repay the debt. And the lender has a buyer lined up, so houses don’t sit vacant for extended periods as they can during foreclosures.

Heagerty said short sales are better for the community because foreclosures are more likely to lead to unkempt homes or vandalism.

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