Foreclosures in the Phoenix metro area (Maricopa County) are spiking:
"Investors, particularly individuals with multiple properties, are driving up the foreclosure numbers," said Tom Ruff, a principal with the Information Market, a Phoenix-based data research firm that compiled the residential foreclosure records.
Ruff added that foreclosures in the Phoenix metro area haven’t likely peaked yet, either.
Through May, 8,597 notices of trustee sales for homes, the precursor to a foreclosure, were filed in Maricopa County _ putting metro Phoenix on pace to top 18,000 this year.Already this year, actual foreclosures are more than double what they were for all of last year.
To put that in perspective, here’s the graph of the average number of notice of trustee sales (NOTs) per month in the Maricopa County: [Note: The monthly average was used rather than the total year's figure in order to enable us to compare 2007 to previous years.]
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Not only is Phoenix experiencing the greatest number of NOTs/month that it has seen in the past 24 years, [I only have data back to 1983.] but the steepest year over year rise as well:
A Notice of Trustee Sale is not a foreclosure. A NOT is basically a warning indicating that you have 90 days to bring your account current, make other arrangements with the lender, or have your property auctioned off on the courthouse steps. If you sell, refi or renegotiate with the lender during the 90 day period, the NOT is cancelled. The average number of NOTs per month actually rose rather markedly from 1996 to 2003. However, there was also a rise in the number of cancellations as well, so the net result was a lower foreclosure rate than we are seeing currently.
Following is the NOTs vs. Cancelled NOTs graph. Note that in 2005 cancellations exceeded NOTs. That is because there is a lag between the NOT and the cancellation- a cancellation can happen several months after the NOT. For example, it was possible for a property owner to receive a NOT in December 2004, but sell the property in February of 2005:
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It would be nice to see how the forclosures correlate with the ARM resets.
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Metro,
from what I gather of your graph Set, Aug looks to be a huge month in Subprime and option arm resets this year? I have heard this from a number of sources. I think this will drive the foreclosures right through the roof. This is a nationwide graph? Can you pull an AZ graph? or is it an AZ graph?
That is the national picture, however I have seen on other sites/blogs regional data for the IO and ARM data and I seem to recall that San Diego, LV and Phoenix have a disproportionate amount of these toxic loans.
Aaaaudio, Metro-
This would make you think Phoenix would fare worse than the national average:
I forgot about that one. Funny how ATL is the worst off and they had very little runup.
Mind you that this map is of IO lowns and not ARM.
Metro-
Thanks for pointing that out- I seem to remember seeing an ARM map, and the distribution was extremely similar to this one. I can’t seem to run it down at the moment, hence my closest substitute.
Just don’t post this stuff on the RE blogs for AZ… they will delete it with reckless abandon. I was even super polite…
The map of misery!
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Thank you both for your posts. That is really interesting stuff.