Although there are fewer foreclosure listings in Payson than in the Valley, their numbers are having a significant impact on the Rim Country real estate market by pushing home prices down.
Sellers are being forced to lower their prices to compete with foreclosed and short sale homes, said Central Arizona Board of Realtors (CABOR) President Annette Bashaw.
For the first four months of 2009, homes sold, on average, 30 percent less than the same time last year, according to CABOR’s multiple listing service.
While homes are selling for less, Realtors are still selling about the same number of homes, with the quantity sold down 7 percent from last year.
“Prices are continuing to drop as a result of foreclosures and short sales, even though many homes are not foreclosure properties,” Bashaw said.
“It makes it very tough to sell a more expensive home when there is a foreclosure home in the area.”
Sellers have to justify a higher price with amenities and upgrades, she added.
Distressed properties need to be liquidated from the market before home prices can level off. Bashaw said prices continue to drop and will until this happens.
“Sellers have to price right or they will be behind the eight ball and have to play catch up later,” she said.
With slashed prices, it is the perfect market for a first-time homebuyer or a person looking for a second home. The average list price for homes in Payson and Star Valley is $382,000, with the average home selling for $245,000 for the first four months of the year.
Just a year ago, more homes in the $500,000 range were selling, but now with the market down sharply, it is common to see buyers snatching up $200,000 homes, Bashaw said.
“We have seen a significant increase in business since late March and April, and a lot of new listings,” she said.
“More people are coming in to look for homes with residential selling far greater than land.”
With a tight finance market and only a few banks in town that will carry, Bashaw said land is not selling. Furthermore, most banks require 25 percent down on land and most buyers do not have that amount to put down.
Until creditors are not as critical, it will be difficult to buy land, she added.