Valley housing recovery on track

National real-estate analyst Tim Sullivan of the Sullivan Group put together a seven-point test to track a recovery of metropolitan Phoenix's housing market. Last December, the Valley passed only one of the measures.

Check out the area's current housing report card on Sullivan's seven criteria. The market is getting better marks.

• The number of resales on the market falls below a seven-month supply.

The Valley has 55,620 homes for sale, according to the Cromford Report's analysis of Arizona Regional Multiple Listing Service data. That's about a 12-month supply, which is better than the market's 14-month supply of homes for sale a year ago.

• Home sales need to stop slowing.

Resales are up from a year ago, according to realty studies at Arizona State University. Last month, 4,465 existing homes sold Valley-wide. That compares with 3,280 in November 2007.

• New-home permits must fall.

New-home permits dropped to 697 in October, their lowest level in more than 25 years, according to RL Brown's Phoenix Housing Market Letter.

• Mortgage-purchase applications increase.

Applications from home buyers did increase last week, according to the Mortgage Bankers Association of America.

• Thirty-year mortgage rates drop to 6 percent.

The average 30-year rate is down to almost 5.9 percent this week, according to Freddie Mac.

• Affordability must improve dramatically.

Valley home prices dropped 26 percent through August, according to data released Tuesday from ASU's Repeat Sales Index. The Valley's median has dropped to $175,000. That makes many Valley homeowners, including me, cringe. But it means a lot more first-time buyers can afford homes, which will help the market.

• At least one major home builder goes away.

Unfortunately, several builders have gone under.

Score: The Valley's housing market has six out of the seven indicators, a much better score than last year. Unfortunately, now the financial and credit markets must stabilize and the recession must end before the housing market recovers.

LandAmerica news

LandAmerica, the nation's third-largest title insurer, filed for Chapter 11 bankruptcy reorganization last week.

The Richmond, Va.-based firm, which is among the Valley's top five title insurers, remains in operation but also is selling its Lawyers Title and Commonwealth Land Title divisions to Fidelity National Financial. Those two units account for about 90 percent of LandAmerica's title-insurance operations.

The title-insurance industry has been consolidating since late last year. Several escrow and title firms in Arizona have closed their doors or shut down branches.

Reach the reporter at catherine.reagor@arizonarepublic.com.