I grew up in Phoenix, witnessing its mutli-decade real estate boom. For years speculative real estate deals transformed arid desert valley to tract home nirvana where home flipping and rental properties became a way of life, replacing agriculture and military industrial complex high tech manufacturing. This way of life is now unwinding to unknown levels.
Seriously, plot the next data point for 6 months and 1 year into the future. Take note of the momentum of this phenomenon; this is a high probability financial catastrophe.
www.azcentral.com/news/articles/2008/07/22/20080722foreclosure0722.
Metropolitan Phoenix's foreclosure problem has spread. Many Valley neighborhoods closer in, particularly in south, west and central Phoenix, now have the highest foreclosure rates, according to an Arizona Republic analysis of real-estate data from the Information Market.
Foreclosures across metro Phoenix number 16,647 for the first half of the year compared with 9,966 during all of 2007 and 1,070 in 2006.
Last summer, when foreclosures were just starting to climb, the highest rates of home defaults were found on the Valley's more affordable fringes. The problem worsened, hitting a wider swath of homeowners who bought at the peak of the housing boom through subprime loans. Although some of the Valley's fringe areas such as Surprise, Anthem and Buckeye continue to have high foreclosure rates, the problem has moved inward. Metropolitan Phoenix's foreclosure problem has spread. Many Valley neighborhoods closer in, particularly in south, west and central Phoenix, now have the highest foreclosure rates, according to an Arizona Republic analysis of real-estate data from the Information Market.
Many of the homes going into foreclosure were bought or refinanced during the peak of the housing boom in 2006, according to property records. Home prices are down almost 30 percent from that time, so many people struggling now owe much more than their home is worth. The median resale price today is $210,000.
Notice of trustee sales, or pre-foreclosures, also continue to climb. There were 35,111 pre-foreclosures filed in Maricopa County through July. That compares with 30,166 for all of 2007. When pre-foreclosures stop climbing, foreclosures could peak a few months later, Ruff said "It has become more of an equity problem than a subprime problem," said Tom Ruff, a real-estate analyst with Information Market.
Many of the homes going into foreclosure were bought or refinanced during the peak of the housing boom in 2006, according to property records. Home prices are down almost 30 percent from that time, so many people struggling now owe much more than their home is worth. The median resale price today is $210,000.
Notice of trustee sales, or pre-foreclosures, also continue to climb. There were 35,111 pre-foreclosures filed in Maricopa County through July. That compares with 30,166 for all of 2007. When pre-foreclosures stop climbing, foreclosures could peak a few months later, Ruff said.
1 comments:
It was 2006 when I opened an equity line of credit. The bank rep was shocked to find my mortgage was nearly paid and that I had no other outstanding loans or credit card balances. She said most people had borrowed against their house to pay for things like cars, boats and vacations. And I believe that is the real reason we're in the mess we are right now. People used their house like a finance company or a pawn shop.
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