First-Time Buyers Seize Phoenix Foreclosed Homes for Sale

During the housing boom from 2004 to 2006, investors and other third-party buyers dominated the housing market in the Phoenix metro area. Now first-time homebuyers are invading the market and buying most of the foreclosed homes for sale across the city.

Real estate analysts in the area said that first-time home buyers will soon account for 50 percent of the metro area’s total home sales.

In the first two months of 2009, sales to investors still accounted for many purchases of bargain-priced foreclosed homes for sale across the city, but they did not dominate the market as aggressively as they did in the heydays.

In April, around 19 percent of homes for sale in the metro area were snapped up by investors, based on data from Cromford Report real estate consultant Mike Orr, who analyzes data from the Information Market and the Arizona Regional Multiple Listing Service.

During the heyday of the housing market, home purchases by investors accounted for about 40 percent of home sales in the Phoenix metro area.

Among the factors encouraging first-time homebuyers to plunge into the housing market are the federal $8,000 tax credit for first-time home buyers and various programs offered by states, cities and counties to help first-time home buyers to buy foreclosed homes for sale. Funds from the federal Neighborhood Stabilization Program also enabled cities to help lower-income families to take advantage of the low prices of foreclosed homes for sale.

The median home price in the Phoenix metro area is $116,500, an increase of 1.3 percent from the $115,000 median price in April. Analysts said the increase is negligible, but if the gains continue for the next 12 months, home prices could improve by an annual total of 15.6 percent.

The per-square-foot median price of a home in the Phoenix metro area increased to $84.86 in May, an increase of 2.4 percent compared to the price in April.

Orr also related that Valley homes offered for sale below $150,000 are easily and quickly snapped up. Many foreclosed homes for sale in the $150,000 range have been getting multiple purchase offers.

Realtors have also observed that the investors buying homes in Phoenix now are different from the housing boom speculators who made very small amounts of down payments and who just walked away when the market collapsed.

Now many investors are expressing their faith in the Phoenix metro area by buying in cash or making large down payments for foreclosed homes for sale.

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