Home sales continue upward trend
By DANIEL CALLAHAN/The Daily News
Published: Wednesday, June 2, 2010 12:38 AM MDT
BULLHEAD CITY — Seventy-seven homes were sold in Bullhead City in April, according to information taken from the Western Arizona Realtor Data Exchange. April 2009 saw just 60 homes sold, which marks April as the 18th month in a row of year-over-year local sales increases.
Inventory in the Bullhead area again decreased this month, bringing the overall supply of residential homes to 7.9 months supply, down from 8.1 months in March and 11.2 in December 2009. Six months supply is generally considered a balanced market.
Even as the inventory decreased “more houses came on the market in April than we’ve seen in several months,” said Evan Fuchs, the broker with Bullhead/Laughlin Realty, indicating healthy sales/inventory numbers.
Months of supply is a good indicator, Fuchs said, because it takes more than simply the number of homes on the market in account.
“The months of supply takes into consideration both the rate of sale and the inventory,” he said, allowing for a broader view of the health of the market.
While sales have seen a steady increase, prices continue to decline, said Bob Lewis of P.R.O. Realty in Bullhead City.
“Values are slowing down in dropping, but they’re still dropping,” he said.
In the first two quarters of 2009, the average sale price in Bullhead City was around $162,000. The first two quarters of 2010 have seen a 27.64 decrease in that average sale price to $117,230.
“We know we have foreclosures coming for a while,” which drives down price, Fuchs said. With a glut of foreclosures, the houses on the market that are owner-occupied are assessed compared the price of a foreclosed home, which is generally much lower and attracts more buyers.
“It’s a great time to buy,” Lewis said, if the buyer plans to be in the homefor a number years. Homes are not an investment, financially speaking, but the generalized 5 percent increase in value has been consistent in the long term. There are spikes and drops in that graph, he said, but over five to 10 years, the increase holds true.
There is some concern on the national scene that the improvements in the housing market were brought on by and expire with government incentives such as the first-time home buyer tax credit, which granted a $8,000 tax credit to first-time home buyers and $6,500 to current homeowners who bought and moved into a new home.
“My gut feeling is it’s still going to be a free market situation,” which draws the real estate market out of the troubles it has recently seen, Fuchs said. “It’s not going to be federal programs.”
Despite government programs such as the Making Home Affordable Program or its counterpart, the Home Affordable Foreclosure Alternatives Program, the number of closed short sales did not increase in a statistically notable way in April.
“It feels like there’s more going on” from all the industry discussion of short sales, Fuchs said, but WARDEX shows just five short sales closed in April posing the question of whether the numbers are going to start going up.
“I foresee you’re going to see a lot more short sales happening,” Lewis said, attributing the increase less to the government incentives or programs and more toward the greater education of the banks and lenders.
“Banks are staring to realize they’re not going to get the money out of those loans,” he said.
It costs the bank around $6,000 to turn a foreclosed property around for sale, Lewis said. Tack onto that the 5 percent to 6 percent sales commission and the bank needs to sell that house for more than what it is worth just to see a return on the outstanding loan amount.
“It didn’t sink in six months ago, but it’s starting to sink in now,” Lewis said.
Pamela Mello works with Buyers and Sellers and is a Certified Distressed Property Expert and Short Sale Foreclosure Resource Certified