Maricopa and Pinal County Real Estate Statistics provided by Michael J Orr, Director at the Center for Real Estate Theory and Practice, W P Carey School of Business, Arizona State University.
• Overall single family home prices are now higher than 12 months ago:
o The median sales price is up 8.3% from $115,000 to $124,500
o Average price per square foot is up 4.1% from $81.07 to $84.36
• Pricing has moved higher since reaching a low point in September 2011
• Supply is down 42% compared with 12 months ago
• Monthly foreclosure starts rose in February 2012 but were still down 9% from February 2011
• Monthly foreclosures completions were down 52% from February 2011
• There has been a 72% reduction in the number of homes reverting to lenders at trustee sale
• Overall sales were 9% higher than in February 2011
• Single family home sales increased for
o New homes (up 26%)
o Normal re-sales (up 63%)
o Investor flips (up 71%)
o Short sales and pre-foreclosures (up 34%)
o HUD sales (up 9%)
o Third party purchases at trustee sale (up 15%)
• Single family home sales reduced for:
o Bank owned homes (down 40%)
o GSE (Fannie Mae, Freddie Mac, etc.) owned homes (down 58%)
Unless otherwise stated all the statistics shown are for Maricopa and Pinal Counties combined.
In February the selling season starts to accelerate as we move out of the winter lull, but the pace of
sales activity does not reach the high point we usually see in March through June. This year we are
following the same pattern, but there has been a big change in our market over the last 12 months.
The sections below compare February 2012 data for Maricopa and Pinal County with that for February
2011. Because foreclosures and short sales continue to exert a strong influence on the market we have
analyzed volumes and pricing for 8 different transaction types as well as for the overall totals. Individual
statistics are also provided in the attached tables by county and by city.
Single family home sales rose 8.5% compared with February 2011, with Maricopa County up 10.0% to
7,190 while Pinal County was down 1.3% to 996. However these numbers hide more dramatic changes
in the types of sales taking place. In February 2011 the majority (77%) of trustee auctions received no
bid and the property reverted to the foreclosing lender. In February 2012, bidding at these auctions has
become far more competitive and 56% of the properties are now going to third party bidders. This
means far fewer foreclosed homes have been added to the REO inventory of banks and GSE lenders. As
a result of the lower inventory, subsequent sales by these organizations have declined dramatically.
According to the STAT report from our local Multiple Listing Service (ARMLS Inc), there were 23,736
active listings in February. This is down 42% from the 40,666 we saw a year ago. This is a significant drop
in supply and the inventory of homes for sales is now well below the average for the last 10 years.
Supply is heavily weighted towards the higher priced end of the market where there are still plenty of
homes available. As we move down the price ranges the inventory of homes for sale drops off
dramatically. In particular the inventory of single family homes for sale under $250,000 that do not
already have an offer is now less than 25 days of supply. This is highly unusual and signals a market that
is heavily out of balance with far more buyers than sellers.
We can see that overall prices reached a low point in September 2011 and have risen since then.
However the picture is far more complex than that suggests.
We had a big month for foreclosure starts in February 2012, with a jump of 32% from January to 4,907
primarily due to a large batch of new notices issued by two of the larger banks. However new notices of
trustee sale were still down by 9% compared with February last year (for single family and townhouse /
condo combined). Our worst month ever for new notices was March 2009 with 11,354, and we are still
down 57% from that peak level. The breakdown by county was 4,397 for Maricopa and 510 for Pinal. For
comparison with “normal” levels of foreclosure notices, in 2002 we averaged 1,160 per month for
Maricopa County. Since the population has grown by about 20% since 2002, we would consider 1,400
foreclosure notices per month a normal level for Maricopa County, so we were still at slightly more than
three times the normal level in February. A normal level for Pinal County is harder to estimate because
the population in Pinal County has more than doubled in the last 10 years.
We can see a dramatic change in foreclosure results when we compare February 2012 with February
• The number of completed trustee deeds is down by 52%
• The number of homes reverting to lenders is down by 72%
• The number of homes purchased by third parties at the auction is up by 18%
So the supply of REOs has been dramatically reduced while the number of homes being purchased by
third parties at auction is at unprecedentedly high levels for the time of year. In February 2012 18%
more homes were being purchased at the auction than were going back to the lenders and we continue
to see the growth in third party share increasing over the coming months. This time last year there were
3.5 homes going back to the lender for each one purchased by a third party.
New Home Sales
Recorded new single family home sales increased by 26% from the low level of 393 in February 2011 to
497 in February 2012, a similar level to January 2012. New home sales were very much concentrated in
the southeast valley with Gilbert (119 homes), Phoenix (55), Chandler (50) and Mesa (42) leading the
counts. With fewer new luxury homes in the mix, overall average pricing was slightly lower in February
than January. However developers are now seeing much stronger demand and have started to increase
prices in several of their most popular subdivisions. They have been caught slightly by surprise by the
speed of the decline in resale inventory and although we see a surge in permits being issued it will take
some time for developers to substantially increase the production of new homes. New home sales
currently represent only 6% of the total market.
Normal owner-occupier single family re-sales jumped from 1,425 in February 2011 to 2,323 in February
2012. This increase of 63% was accompanied by a significant reduction in average price per sq. ft. from
$127.19 to $107.77. The median sales price fell 14% from $180,000 to $147,000. This negative price
trend for normal sales is due to the large increase in normal sales at the lower end of the market. The
luxury market remained relatively quiet during February and has not participated in the sales volume
These are similar to normal re-sales in that there is no distressed owner, but we count separately those
sales where the property was previously purchased within the last 6 months. Often the investor
obtained a distressed property at a trustee sale (sometimes through a wholesaler), as an REO or, less
frequently, as a short sale. The investor usually refurbishes and renovates the property and then sells
the home somewhat below the price for normal sales in order to ensure it sells quickly.
Prices for investor flips have moved in the opposite direction to normal sales, with average $/SF
increasing by 4.6% between February 2011 and February 2012 for single family homes. The number of
investor flips has grown by 69% in Maricopa and by 78% in Pinal Counties over the last year and they
now represent about 13% of total sales, up from 9% in February 2011. Flips are therefore a very
significant part of the current market, delivering more than twice as many homes to buyers as the home
Short Sales and Pre-foreclosures
Lenders have looked more favorably at short sales over the last year as the best means of resolving a
delinquent loan where the borrower is no longer able or willing to make the monthly payments.
Consequently we have seen short sales volumes grow by 33% in Maricopa and 41% in Pinal. As lenders
approve more offers, pricing for short sale single family homes has declined from $76.01 to $74.28 per
sq. ft. over the last 12 months. Short sales and pre-foreclosures represent about 20% of total sales, up
from 16% in February 2011.
Bank Owned Sales
Often referred to as REO sales, these are properties owned by commercial lenders following a
completed foreclosure. If there are no bidders at the trustee sale the trustee issues a deed in favor of
the beneficiary, i.e. the foreclosing lender, who subsequently liquidates the asset by marketing the
property as a “bank owned home”.
Between February 2011 and February 2012 these REOs have declined sharply in volume, with Pinal
County down 47% and Maricopa County down 39%. Sales $/SF pricing for the remaining bank owned
single family REOs is up by 11% in Pinal County and 9% in Maricopa over the last 12 months. Bank
owned REOs now represent only 8% of the market, down from 15% in February 2011.
Fannie Mae / Freddie Mac / VA Sales
Similar to Bank Owned Sales except the entity receiving the foreclosed home is a government sponsored
enterprise (GSE) rather than a commercial lender. Between February 2011 and February 2012 these
REOs have declined very significantly in volume, with Pinal County down 64% and Maricopa County
down 56%. Sales $/SF pricing for GSE single family REOs is up by 18% in both counties over the last 12
months. GSE REOs represent 9% of the market, down from 22% in February 2011.
If a bank receives a property through foreclosure where the loan had been insured by FHA, the lender
will usually deed the property to HUD for disposal. These are generally the cheapest homes available in
any area although they are not usually numerous. HUD sales peaked during the second quarter of 2011
and have been in decline since. Prices have increased an average of 10% over the last 12 months, but at
$49.27 per sq. ft. remain much lower than most other sources of single family homes.
Third Party Purchases from Trustee Sales
Although trustee sales have declined since peaking in March 2010, foreclosures still provide a significant
supply of homes for those willing to bid at the trustee auction. During February 2012, there were 1,133
single family homes purchased by third parties in this way, 994 in Maricopa and 139 in Pinal. The trustee
sales have turned into something of a feeding frenzy as the number of auctioned properties has fallen
and the number of bidders continues to grow. Average prices have risen from $60.59 to $63.08 per sq.
ft. for these homes over the last 12 months. They represent 14% of the market, up from 13% in February
Reverted to Lender (i.e. Beneficiary)
If the lender sets an opening bid which is too high to attract any bids then the property fails to sell and it
becomes the lender’s property to dispose of. The outstanding loan debt is removed with no recourse
(under Arizona law) to the original borrower. Most other liens (but not necessarily all) are also
eliminated at this time. When the lender is not interested in disposing of the property through the
trustee sale, the opening bid is often set to be the outstanding loan balance plus expenses, so this will
usually be well in excess of the current market value. As such the bid has little to no relevance to us and
we do not record it as a sale. However if the lender wishes to liquidate the home at the trustee sale, an
opening bid is set which is low enough to attract the interest of third parties. Over the last 12 months,
more opening bids have been set at reasonable levels and combined with increased investor demand
the number of reversions to beneficiaries has dropped sharply. There were 3,284 in February 2011 and
only 904 in February 2012 for single family homes.
Out of State Purchasers
The percentage of residences in Maricopa County sold to owners from outside Arizona reduced slightly
between February 2011 and February 2012. It fell from 27.0% to 26.0% by unit count and from 30.3% to
27.8% by dollar value.
Cash purchases are running at an abnormally high level due to strict underwriting guidelines imposed by
lenders. Nevertheless in Maricopa County in February 2012 the percentage of properties purchased
without a loan fell slightly from 41.9% to 40.2% by unit count and from 35.8% to 34.7% by dollar value,
when compared with February 2011.
When someone purchases real property in Arizona, an Affidavit of Value is usually recorded by the
county. The new owner indicates whether the property will be occupied by the owner or a “family
member”, or instead will be rented to someone other than a “family member”. Studying this
information gives us some idea how many homes are being acquired by landlords.
After a slump during the third quarter of 2011, the Phoenix residential market has improved significantly
for sellers and a swift recovery is now well under way. Supply of single family and condo homes is now
very low, interest rates are low, the economy is showing signs of life and prices are still very affordable
compared with salaries and rental rates. However the supply of homes is now so tight that buying one is
often quite a struggle, primarily due to the intense competition for the few homes available for sale.
Public sentiment toward housing remains relatively poor but is now starting to improve as signs emerge
that the worst of the housing crisis is over. Loans are still hard to come by and a financed buyer is
usually at a distinct disadvantage when competing against a cash buyer who is prepared to waive their
With prices that have declined from their peak in June 2006 more than almost anywhere in the US, we
still have a large number of homeowners with loans that exceed the market value of their home.
Following the launch of HARP 2.0 and the recent settlement between the states and five large lenders,
these homeowners may have more of an opportunity to refinance into low interest loans. This will not
resolve their underwater condition, but perhaps it will reduce their monthly payments and allow them
to feel less financial stress. At the moment the success of these programs remains to be proven.
Given that wholesale reductions in loan principals appear unlikely, the main mechanism available to
solve underwater loan problems is for prices to rise. Overall prices have already improved by some 15%
since September 2011 and are currently on a strong upward trend. However that trend is fueled mainly
by the rise in the prices of lender owned properties, auctioned homes and flips. Normal re-sales and
short sales have yet to really participate in the improving price movement. It will take many months of
strong improvement for the negative equity problem to abate, and there is little chance of pricing
achieving the heights of 2006 in the medium term. However we now have a severe supply/demand
imbalance that favors sellers and sets us up for the possibility of a significant rise in pricing at the lower
and middle sectors of the market in the immediate future.
Source & Acknowledgement
The sales and foreclosure transaction data used in this report was compiled by the Information Market
LLC of Glendale AZ (www.theinformationmarket.com). ASU wishes to thank them for their extensive
cooperation in creating this report. We would also like to thank ARMLS Inc. for permission to use the
active listing statistics from their monthly STAT report.