Phoenix Real Estate - Has It Hit Bottom?

According to a report from Arizona State University released mid Jan 2010, lenders in 2009 foreclosed on about 41,000 single-family detached homes in Maricopa County. That's more foreclosures than the Valley has seen during any previous year on record, accounting for more than 35 percent of all existing-home transactions, the report said.

Its author, Jay Butler, associate professor of real estate at the W.P. Carey School of Business, said overall home-resale volume in 2009 rivaled that of the real-estate boom's peak year of 2005, but for all the wrong reasons.

"That (2005 sales volume) was ... due to rising home values and a type of euphoria about real-estate investment," Butler said. "Now we're seeing a totally different type of activity driven by foreclosures."

Foreclosures were up in December, at 4,060, compared with the previous month's total of 2,985, and the median single-family home price decreased to $140,000 from $143,000 in November, according to the ASU report.

Home resales increased, with 5,740 sales in December compared with 5,350 sales the previous month.

Compared with December 2008, foreclosures increased about 31 percent, the median resale price was down 4 percent, and resale volume was up 33 percent.

As much as this hype is driven by investors thinking that the market has hit "bottom" and that prices have no where to go up but from here, it is important to still wait and see. Because as we understand from real estate cycles, we must not buy when everyone else is buying. As long as the "buying" frenzy persists, it is unlikely that we've really seen the bottom of this market. It is wise to wait until real owners occupy these homes before really going in for the last dibs.