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Trusted local news leader for Prescott area communities since 1882
8:35 AM Mon, Nov. 19th

2009 sales beat '08, but distressed sales continue to dominate market

It's a trend that some might see as the start of a recovery in the local residential market.

For the past six months of 2009, home sales were better than the same months in 2008, according to data from Ed Pattermann, member of the board of directors for the Prescott Area Association of Realtors and owner/broker of Windermere Real Estate in Prescott.

Pattermann's data from the Prescott Area Association of Realtors' Multiple Listing Service shows real estate agents sold 1,996 homes in 2008 and 2,306 this past year, creating a 15.5 percent spike in sales.

Pattermann said that once inventory shrinks and gets back to more realistic levels, prices can climb again.

"That (sales spike) in itself just means more business, more activity, getting the inventory down, which I think everyone agrees is the only way we're going to start seeing some appreciation in real estate," he said. "I think we could very well, a year or two from now, look back and say that's when it started to turn."

While the sales spike is welcome news, digging a little deeper shows distressed home transactions continue to sit in the driver's seat of the local housing market, with buyers taking advantage of rock-bottom prices.

Jeri Kooiman, owner/broker of Kooiman Reality in Prescott Valley, doesn't see such a rosy picture.

"It's not a sign things are getting better," she said.

Kooiman believes another wave of foreclosures is on the horizon, this time focusing on people with 30-year fixed loans.

This wave will take down homeowners with good credit, jobs, and savings who lost hours or employment from the economic slowdown and are unable to make their mortgage payments, Kooiman said.

"In today's environment people cannot make their mortgage payments on a one-salary income," she said. "I don't think 2010 is going to do it.

"These banks are trying to get as many of these foreclosures off their books as they possibly can. I really truly believe it's going to be a long time."

Karyn Banfield handles foreclosure transactions for Kooiman and she said one national lender is estimating a wave of about 600 foreclosures statewide in the first quarter of the year.

As of Wednesday afternoon, Banfield said nearly 2,200 homes are on the market and about 500 of them are short sales or distressed properties, which accounts for roughly 23 percent of the market.

And the average sales price from 2008 to 2009 is down 22 percent.

Charlie Arnold, Realtor and director of operations for Bright Star Homes in Chino Valley, sees both sides.

"I see it (the sales spike) as a positive indicator for our marketplace, and I am optimistic that we will continue on this path," he said. "If our numbers stay strong there is no reason why we shouldn't beat last year and '08. This is probably the best news we've had in a long time."

But a scan of the data from the local Multiple Listing Service figures by Arnold shows 90 or more short-sale or foreclosure transactions every month since June 2009.

"We're obviously burning through the distressed sales," he said.