Dr. Jay Butler of Realty Studies at Arizona State University came out with his Phoenix area residential real estate sales and median home price numbers for July 2011.

For the first time since the spring of 2009, the Phoenix-area foreclosure rate has dropped below 30 percent of the existing-home transactions in the market. A new report from the W. P. Carey School of Business at Arizona State University confirms five months in a row of foreclosure-rate declines.

The Phoenix area has been hit especially hard by the impact of foreclosures. In January and February, foreclosures represented 43 percent of the existing-home transactions in the market. Then, the rate fell to 38 percent in March, 36 percent in April, 35 percent in May, 31 percent in June, and finally, to 29 percent in July.

The Phoenix real estate market became accustomed to high AND INCREASING foreclosures. Now when we have high BUT DECREASING foreclosures, the Phoenix real estate market is entirely different.

Lender-owned listings are super-charged listings, they sell super fast.

So a hundred lender-owned listings puts a lot more downward pressure on the median home price than a 100 non-bank-owned listings.

As the number of bank-owned listings (and sales) declines, that will put a lot LESS downward pressure on Phoenix home prices.

Sure, foreclosures are still very high but they are declining instead of increasing and that difference makes all the difference in the world.

Greater Phoenix – Median Home Price

(Single-family resale homes. Excludes repossessions but includes sales by banks after they repossess. ASU calls these “Traditional Sales”)

July 2011: $127,200
July 2010: $144,000

According to Dr. Butler’s dataset, the median home price in Maricopa County bottomed out in April 2009 at $125,000 and rose 15% to peak at $144,000 in April and May 2010 before falling again to $125,000 in December 2010, January, March and April 2011.

The stock market technical analysts out there might say we are seeing tremendous resistance at $125,000. I strongly doubt we’ll ever see $125,000 again.

I think the median Phoenix home price could quickly pop up to $144,000+ again. If not in the second half of this year, then certainly in the first half of 2012.

Greater Phoenix – Number of Homes Sold

(Single-family resale homes. Excludes repossessions but includes sales by banks after they repossess. ASU calls these “Traditional Sales”)

April 2011: 8,625
April 2010: 8,945