Phoenix-area home prices continued to drop for the third straight month in August, with the median resale price having tumbled $9,000 since May, according to a study recently released by Arizona State University.
Meanwhile, foreclosures are making up a larger percentage of all existing homes that are changing hands, according to the report authored by Jay Butler, an associate real estate professor with ASU's W. P. Carey School of Business.
"Foreclosures accounted for 45 percent of the existing-home market activity in August," Butler said. "When you add in resales of previously foreclosed-on homes, all of this foreclosure-related activity represents a full two-thirds of the market's transactions in August."
The median home-resale price for August was $135,000. That's down from $137,500 in July, $143,000 in June and $144,000 in May, demonstrating a sustained slide, according to the report.
Sales activity overall is slowing down, now that summer "selling season" is wrapping up, Butler said. In August, 4,800 homes were resold, down from almost 5,100 in July.
"As the year comes to an end, median prices often decline in response to holiday and school activities that allow little time or desire to buy a home," he said.
The poor economy has many potential homebuyers reticent to extend themselves financially, according to Butler.
"Although current interest rates and home prices are very attractive, homeowners don't seem to be motivated to buy," he said. "This lack of motivation can be attributed to an anemic economy and job recovery, low consumer confidence and stricter underwriting guidelines, among other factors."
About 4,000 foreclosures were recorded in Maricopa County in August. That's slightly up from about 3,900 foreclosures in July, but significantly up from last August's total of about 3,100, the report states.
Foreclosures in the townhouse/condominium market also continued to rise, with 630 foreclosures in August, up from 590 in July, according to the report. The median townhome/condo price has plunged from $105,000 in August 2009 to about $80,000 in August 2010, the report states.