Market Distress Phoenix

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The preceding dashboard indicates how foreclosure activity is affecting the market in the noted city.

There are five main components to the dashboard.

The pie-chart at the top left indicates what proportion of the active listings are lender-owned, pre-foreclosure or normal. The pie chart at the top right indicates what proportion of monthly sales was lender-owned, pre-foreclosure or normal.

The column chart at the bottom left shows average pricing for active listings in $ per square foot, divided into the three categories and the column chart at the bottom right does the same thing for monthly sales.

The Distress Index gauge at the center shows a value from 0 to 100 which expresses the overall level of foreclosure activity. This allows easy comparison between one city and another.

REOs or lender-owned properties have already been through the foreclosure process and completed their trustee sale. These properties were sold by the trustee to the beneficiary (lender). In some trustee sales (typically 20% to 25% at the moment), the property may be sold to an investor or wholesaler who is prepared to bid higher than the bank. These properties are not classified as lender-owned. The lenders use the ARMLS system quite heavily to market their inventory of homes and compete aggressively on price. At the moment we see lender-owned properties constituting a significant share of the homes listed for sale, and a much large proportion of the homes actually sold.

The Pre-foreclosure category includes those properties that have started the foreclosure process but have not yet had the trustee sale. We also include those which are being marketed in a short-sale situation, even if a notice of trustee sale has not been issued. In a full pre-foreclosure situation, the owner(s) have received a notice of trustee sale and the property is being marketed in order to try to sell the home before foreclosure completes. Many of pre-foreclosures are in a “short sale” situation, where the price asked is lower than the outstanding debt secured by the home. Such sales require the approval of the lender. We generally refer to all these situations as “distressed sales”

Normal sales are those where the owner has the unencumbered right to sell the property without requiring approval from a lender, court or external corporation of any kind, and the owner is not a financial institution. In a normal market these constitute the vast majority of all listings and sales. The degree to which these sales become a smaller proportion of all sales indicates the level of distress being felt in the market.

Active listings include active-with-contingency and are measured at the beginning of the calendar month. All figures are for single family detached homes only. Monthly sales means sales that closed during the preceding calendar month. The date shown at the top of the dashboard is the date on which this measurement was taken.

© 2011 Cromford Associates LLC

The data used to create the Cromford Report™ is obtained from public records and obtained under license from the Arizona Regional Multiple Listing Service, Inc (ARMLS). Cromford Associates LLC and ARMLS expressly disclaim and make no representations or warranties of any kind, whether express, implied or statutory, as to the accuracy of the data used or the merchantability or fitness for any particular purpose.