Bryan Jones over at the Talon Group emailed me the following spreadsheet with bank owned property statistics for many of the major cities that occurred during the month of October.
| City | Total Sales | REO Sales* | % REO Sales* | Median Price | REO Price* |
| Buckeye | 137 | 88 | 64% | $120,000 | $114,500 |
| Tolleson | 73 | 45 | 62% | $139,900 | $130,900 |
| Avondale | 156 | 90 | 58% | $145,450 | $135,900 |
| Glendale | 294 | 146 | 50% | $149,000 | $120,500 |
| Phoenix | 1274 | 624 | 49% | $128,500 | $99,700 |
| Queen Creek | 316 | 144 | 46% | $126,000 | $119,950 |
| Surprise | 277 | 126 | 45% | $162,500 | $153,250 |
| Goodyear | 126 | 54 | 43% | $165,000 | $147,500 |
| Mesa | 424 | 163 | 38% | $157,000 | $128,000 |
| Peoria | 186 | 67 | 36% | $217,000 | $180,000 |
| Gilbert | 289 | 98 | 34% | $231,000 | $191,000 |
| Chandler | 240 | 68 | 28% | $229,250 | $179,750 |
| Scottsdale | 319 | 67 | 21% | $388,250 | $270,000 |
| Tempe | 82 | 13 | 16% | $223,000 | $138,000 |
| *REO = Bank owned homes | |||||
| Disclaimer: Data obtained from the Arizona Regional Multiple Listing Service (ARMLS). Information deemed accurate, but not guaranteed. Note: information does not include non-MLS private home sales. | |||||
I charted the REO sales percentage on a per city basis, and you can see that only one in five October home sales in the Scottsdale and Tempe markets were bank owned properties, as compared to three in five in some other outlying suburbs, such as Buckeye.
One thing that I find particularly interesting with this data is that appears to be a relationship between the percentage of REO (bank-owned) properties sold for a given city and the percent difference of the REO price compared to the overall median price. This makes sense when you think about it. The more REO’s sold, the more they drive the median price. On the other hand, it implies that bank owned properties sell at at significantly lower price than non-bank owned properties, and I’m not convinced that this is always the case.
So the next question becomes, are there more homes in foreclosure in the outlying areas that are driving these sales? To me, the answer is presumably yes, so I visited the Cromford Report to do a quick comparison of Buckeye and Scottsdale.
In the Buckeye market, it appears that somewhere between 25 and 30 percent of the properties on the market are the bank-owned properties.
In Scottsdale, foreclosures appear to be less than 10% of the available market.
What you will also notice in comparing Active Listings to Sales in both of these markets is that foreclosures are selling at a high percentage rate than are a part of the active market. In my mind, the good news is that the foreclosures are selling and that this process is a critical part of balancing the market. Granted, it may take longer than we like, but it is happening.
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