Slow going: Same story, different month for Phoenix housing market
Marked drops in investors buying cheap distressed homes coupled with tighter mortgage lending continues to slow the Phoenix housing market.
That is according to Michael Orr, an Arizona State University housing expert and the director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business.
“Better bargains for investors can be found in other parts of the country,” says Orr. “Over the last three months, the percentages of homes bought by investors have been lower than we have seen for many years, confirming investors are no longer driving the market the way they did between early 2009 and mid-2013.”
That’s because foreclosures have been down compared to the market meltdown.
Orr said foreclosures in August were down 43 percent compared to a year earlier.
Markets such as Las Vegas and cities in Florida also have worse underwater and distressed rates than Phoenix now, according to the third quarter numbers from RealtyTrac. That is sending investors outside the Valley for cheap purchases.
Orr said investors accounted for 14.4 percent of home purchases in August down from a peak of close to 40 percent in 2012.
There is also less demand for homes. That is driven by tougher post-recession mortgage lending by banks and some consumers still having poor credit or showing less interest in homeownership after seeing equity erased during the downturn.
Mike Sunnucks writes about residential and commercial real estate, government, law, sports business and workplace issues.