Housing market at center of mortgage crisis is blooming again
Tim Woodward and Susan Rust put a contract on their home the day it hit the market.
March 19th, 2012
02:47 PM ET

Housing market at center of mortgage crisis is blooming again

By Lisa Desjardins, CNN

Phoenix, Arizona (CNN) - Want a sign of economic hope? Look to a place where the housing collapse began: Phoenix, Arizona.

"We're talking about (home) prices being 3 to 4% higher than last year, which most people don't believe because they're used to bad news," said Mike Orr, director of Arizona State University's Center of Real Estate Theory and Practice.

Orr's new report on the Phoenix market shows a direct reverse of the situation that sparked a massive housing bubble. Monthly foreclosure starts have fallen 49% since a year ago. Home sales are up 8%. The result? What had been a market with far more housing supply than demand has now become a place where buyers have to act fast and beat out heavy competition.

"It's no longer difficult to sell your house here," Orr told CNN Radio. "If you price it at market, it well sell quickly. The supply situation is unusually low."

Supply is down some 42%, Orr estimates, from September 2008.

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That is a dramatic turnaround for an area that once had a massive supply glut. According to Orr's predecessor at ASU, Jay Butler, during the recession foreclosures hit an eye-popping 12% of the homes in Maricopa County, which includes Phoenix.

But now Orr's report indicates that supply has been soaked up and Phoenix is again becoming a seller's market where buyers must stand in line and move fast.