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Valley existing home sales lag in July
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Sales of existing Valley homes continued to lag in July, as more homeowners fell into foreclosure and tightened lending standards made it difficult for potential buyers to qualify for mortgages.
Some 4,330 existing-home sales were recorded last month, down from 4,910 in June, according to a report released Thursday by Arizona State University’s Realty Studies department. July sales were down 22 percent from the same period last year.
Total sales this year are also well below 2006 numbers.
In the first seven months, 33,510 existing homes were sold, compared with 41,835 sold during the same period last year and 68,235 sales recorded in 2005, the ASU report shows.
The market’s continued erosion stems in part from the rising number of homeowners who are defaulting on monthly mortgage payments.
That’s caused lenders to crack down on exotic loans, especially those that offered 100 percent financing or didn’t require proof of income.
“Overall, it’s getting more difficult to get financing,” Realty Studies director Jay Butler said. “Lenders are scared.”
Some Valley buyers thought they qualified for a loan, only to have those deals fall through because of stricter standards, Butler said. Other buyers are remaining on the sidelines to see if prices will continue falling, he said.
More foreclosure properties have also hit the market, adding to the more than 50,000 homes already for sale in the Valley. And sellers continue to face stiff competition from new home builders, who can offer huge incentives, Butler said.
Earlier in the year, industry observers predicted that the Valley would see home sales in the high 60,000’s or low 70,000’s this year, he said.
Now, “most forecasts are out the window,” he said.
Despite declining sales, however, the Valley’s median home price has remained relatively stable. Last month’s median was $265,000 compared with $264,900 last year.
Also in July, 17 percent of recorded home sales were priced from $125,000 to $199,999, 41 percent cost from $200,000 to $299,999 and 41 percent cost more than $300,000.
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