Nearly half of homes sold in Pinal County are foreclosures

Sales of existing Pinal County homes jumped again in the third quarter but sellers didn’t have much to celebrate in terms of prices.

Some 3,355 recorded resale transactions were reported for the quarter, up from 2,100 in the second quarter and 625 in third-quarter 2007, according to a report by Arizona State University’s Realty Studies department.

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But nearly half of the existing home sales during the third-quarter, or 1,515, were foreclosures, compared to 40 percent during the second quarter.

The common thread among all of the sales has been rapidly declining prices, said Jay Butler, Realty Studies director.

“Homeowners and investors are buying with the expectation of strong appreciation in the future,” he said.

Nationally, pending home sales fell further than expected in September, after posting a big jump in the previous month. The National Association of Realtors said Friday that its seasonally adjusted index of pending sales for existing homes fell 4.6 percent to a reading of 89.2. That’s down from an upwardly revised August reading of 93.5.

In Pinal County, the median price for all transactions has plummeted from $220,000 in fourth-quarter 2005 to $129,000 in the third quarter. The median price was $193,000 in third-quarter 2007.

The foreclosure median price was $135,240, while the median price for traditional sales was $129,200. The median home price in Pinal County was 71 percent of the median price in Maricopa County.

“There’s activity going on, it’s just at a much lower price and a lot of it, to some degree, appears to be investor driven,” Butler said. “They think that it will have rapid appreciation when the market starts to recover.”

Slow progress is being made toward reducing the number of foreclosures on the market in Pinal County. Still, the overall market likely is headed toward another lull as economic trends worsen, he said.

“The economy and projected job losses are making people nervous ... and when you get nervous, you’re not going to go out there and make big purchases,” Butler said.

Queen Creek is especially struggling, and banks are making it more difficult for that market to recover, said Rick Webb, a realtor with Independence Realty Professionals Inc. in Gilbert.

“The situation that we have is there are so many bank-owned properties and the banks are dictating so many conditions that it is making it very difficult for the realtors to get properties sold,” he said. “However, now since we are close to the end of the year, many of the banks want to get as many properties off their books as possible, so they are making decisions (faster).”

Looking ahead, Webb does expect to see improved turnaround on bank-owned properties, and therefore gradually increasing home values.

“After all, (banks) did receive $700 billion to do something, and hopefully it’s not all going to be spent at spas at a half-million dollars a day where they enjoy lobster dinners and get facials, and $500 haircuts,” he said.

Jerry Hoover, a realtor with Arizona Preferred Realty in Queen Creek, expects the market to get worse before it starts down a path toward solid recovery.

“I think we might have another dismal year in 2009, but on the other hand, in 2010, I’m hoping that it levels out and begins to (move slowly upward) where people can start to gain value back into their houses where they lost so much,” he said.