Bank owned properties represent approximately 19% of the MLS inventory, however, they accounted for 45% of properties sold in the past week.  We are seeing that number increasing.  If the lenders can successfully re-negotiate the loans of borrowers currently in, or about to go into default, and if the absorption of foreclosed properties continues to be strong and interest rates continue to be low, we should be able to melt the foreclosure inventory and see price stabilization.

Current conditions in the Phoenix Market:

Today there are 45,448 single family detached listings in MLS.  That is an increase of just 74 listings over last week.

Total listings (including condos, town-homes, and patio homes) in MLS today 55,286, which is an increase of 128 listings.

The interest rates for conforming loans have declined again this week, which is good news.

The statistical review of the same time period last year indicates that "pending" contracts are up 13% and sold volume is up 6% over the same time period.

The overall absorption rate (the number of listings going pending versus the number of active listings) has declined to 11% this week, which is not unusual for the week prior to a holiday.  If you isolate the bank owned properties from seller owned, the absorption rate of bank owned properties is about 22% with the absorption rate of seller owned properties being 6%.