Foreclosures Are not Slowing in Greater Phoenix

Phoenix City

Figures are showing that foreclosure numbers are not slowing in Greater Phoenix. In December 2008 there were 7,425 re-sales of residential units. In January the number dropped to 6,960. Thus while sales were down foreclosure numbers indicated an upward trend.

In January foreclosure related activity (3,370) comprised of 48% of all the transactions. Traditional transactions counted 3,590. By foreclosure transactions are meant those units lost by the owners either at auctions or when banks repossess them. In January there were 4,205 sales. Of these 1,800 came from the foreclosure category – counting to 43% of the total deals.

In January 2009 the foreclosure activity in the Valley differed from place to place. In Surprise, Tempe and Scottsdale it was 51%, 38% and 35% respectively. Despite innumerable measures and moratoriums being taken the pace of foreclosed homes did not slow down.

However accurate recordings of foreclosure activity take time to be noted and it may be there has been some slowing down because of the hold placed on foreclosures during the festive season. This moratorium has been extended by lenders who want to wait and see the response of the new Obama team to the crisis.

At the root of the problem is the extremely weak economy. It is making it difficult for owners to cling on to their houses. This in turn will drastically delay economic recovery thus setting off a chain reacting with one fueling the other.

Jay Butler of Arizona State University (Polytechnic campus) said, “The local housing market will continue to be vexed well into the next year by eroding consumer confidence, brought on by a weak economy, possible job losses and tighter mortgage underwriting guidelines.”

The falling real interest however is attracting potential buyers and especially those who want to reside in their primary homes. Once more dreams about affordable housing are being revived. In the conventional market the median house price in January counted to $136,000. In January 2008 it was $243,000. The price range of foreclosed units was less – the median price being $135,000. In January 2008 it had been $208,250.

Many investors are showing interest. Butler explained, “Investment interest is being driven by the anticipation that home prices will rise again in the next few years. Slightly over 30 percent of the foreclosed homes were sold again with a median price markdown of 13 percent. The markdown varied throughout the Valley, ranging from 40 percent in Maryvale to 28 percent in Gilbert to 7 percent in Tempe.”