August home sales in Phoenix surged to the highest level in five years with a total of 9,657 properties closing, according to the San Diego-based real estate analytic company DataQuick.
There were 8.1% more new and resale homes and condominiums that closed in August from July. This five-year monthly high also helps bring the region to a 35.8% year-over-year increase in home sales.
DataQuick credited the three extra business days in August in which home sales could be recorded, 23 compared to 20 in July, for the monthly uptick. The company also said investors and first-time homebuyers are interested in buying properties that are valued under $150,000.
Because of this factor, the median price paid for all homes sold in Phoenix fell to its lowest level in more than 13 years at $118,000, more than 55% below the region's all-time high of $264,100 in June 2006. According to DataQuick, the median price for home sales has fallen year-over-year for 14 consecutive months.
DataQuick said the dramatic decline in home prices is due to several factors including home price erosion, heavy discounts on distressed properties, the high number of investors and cash buyers who typically target lower-cost homes such as foreclosures and a low percentage of new home sales.
The number of homes that sold in August for less than $100,000 jumped 59.2% over the past year, while sales below $150,000 spiked 49.7% year-over-year. However, sales between $200,000 and $600,000 increased only 15.6% in the last 12 months, while sales for homes priced at or above $800,000 remained flat.
In August, just 7.9% of the overall sales were newly built homes, which are typically more expensive than other properties. The sale of distressed homes—foreclosures and short sales—represented approximately 62% of Phoenix's resale market.
Homebuyers, especially investors, continue to pay cash for properties in Phoenix. Cash buyers represented 42.4% of all sales in August, up 2% from July and 5% higher than August 2010. DataQuick said cash buyers paid about $85,000 for a property in August.
Meanwhile, the use of FHA-insured mortgages for homebuyers continues to slide as it was down to 33.5% in August, down 0.2% from July and 4.8% from last year. DataQuick said this figure for purchasing FHA loans is the lowest since April 2008.
