The number of households in Phoenix, Arizona, entering the home foreclosure process might diminish soon, some industry analysts have noted. According to them, signs have been emerging that the foreclosure problem, instead of peaking, is showing signs of flattening. They stated that the market is still in a slump, but subtle signs are there to give the metro area hope.

Data for March showed that foreclosed homes for sale in Phoenix continued to account for a huge percentage of for-sale inventory; with 38% of existing residential transactions completed during the month attributed to distressed sales. The figure represented a decline of 43% when compared with the previous month. Although analysts admit that the volume of foreclosures would have to dip to a single digit margin first before the metro areas residential industry can return to normal, they stated that a drop in this category is still a good sign.

With foreclosure homes in Arizona still at elevated levels, the biggest challenge for the housing market, analysts asserted, would be in the area of prices. According to them, the huge amount of short sales and foreclosed properties are dragging property values down. As of March, the average price of a bank owned property was at $69 for every square foot, while a short sale has an average rate per square foot of $80.

The difference is still way too big, analysts further claimed, with residences that are not under the home foreclosure process having an average value of $194 for every square foot. In Phoenix, the average rate for every square foot for all existing dwellings was $77.62 during the month, practically the same as the previous years $77.70. This, analysts have asserted, signifies that prices may be flattening.

In addition, the median selling rate for existing houses and foreclosure homes for sale in Phoenix duaring March was $110,000 and although this price is 14% lower than one year ago, the past few months have seen median prices in the metropolitan market hovering near the $110,000 mark. Again, showing a tendency to flatten out. Analysts stated though, that any optimism they feel towards the market is a cautious one.

According to them, the regions job market would still need to improve and the number of residential properties entering the home foreclosure process should diminish first before the housing industry can recover. They added that improving sales, buoyed mainly by improved consumer confidence, will also go a long way towards helping the home market.

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