For nearly six years, we’ve been following the Maricopa County [Phoenix area] Home Sales Report done by Dr. Jay Butler, ASU professor emeritus of Realty Studies. Back in 2008 there was a bit of a scandal when it was shown that Butler’s inclusion of trustee’s sales was skewing the sales numbers. After that, Butler’s broke sales out into “traditional sales” and “foreclosures”. It has also not uncommon for listings to indicate whether or not they are a “traditional” sale. Here’s one example from L’s spam mail:
You might think, based on the listing, that this home is sold by an “owner-occupier”. Not so:
As you can see, this is actually a “flip”. It was purchased by investors, remodeled and put on the market.
Is this some huge scandal or deception? I don’t think so. So why did I bother bringing it up?
Butler is not the only one who has catagorized homes according to traditional vs. foreclosures. These flipper sold homes however, are becoming an increasing part of the market. According to Mike Orr, Dr. Butler’s replacement at ASU:
Investor flips have grown 55% in both Maricopa and Pinal Counties over the last year and now represent about 12% of total sales, up from 8% in January 2011.
I believe that refurbished foreclosures are really part of the “distressed” housing market, however they are catagorized. Doomers should be aware when they see “foreclosed” vs. “traditional” sales figures that traditional may not be as traditional as they think it is.
[Thanks L for your help!]