For all those that believe that the housing market has bottomed in the Phoenix area, I have a question. What do you think happens to the mortgage of these folks? [Thanks L!]
Phoenix-area bankruptcies doubled in June for the second consecutive month, and mounting job losses suggest the number of filings could grow before conditions improve.
Reflecting the Valley’s depressed housing market and weak job picture, bankruptcy filings are rising much faster here compared with the number of national and state applications.
Households and businesses around the Valley filed 2,294 bankruptcy applications last month, up 105 percent from June 2008 and the highest count so far this year.
What is going on here?
"Normally, this time of year we see a slowdown, but we haven’t seen one yet," said Walter E. "Pete" Moak, a bankruptcy attorney at the Moak Law Firm in Chandler.
Bankruptcies usually peak early in the year as people assess their financial situation for income-tax purposes and use tax refunds to cover filing costs, he said.
But Valley filings have risen in four of the past five months.
Job layoffs and furloughs have put some consumers in a bind, while others keep struggling with home payments.
"A lot of people have been trying to save their homes by charging more on their credit cards to maintain their house payments," Moak said.
"Finally, they realize that that’s insanity, that they can’t keep doing it."
The sad shape of personal finance isn’t the only thing driving the foreclosures. According to The Economist:
New research based on a survey of 1,000 homeowners suggests that one in four mortgage defaults are “strategic”—by people who could meet their payments but who choose not to.
So where does this put the Phoenix housing market?
Economists say Phoenix is one of five housing markets nationwide that could continue to see housing prices slip.
A Yahoo! real estate report citing several economists blames the problem on too many vacant homes and foreclosures.
Phoenix is third on a list of housing markets where prices may have further to fall and may not be a good investment any time soon.
Still standing on the sidelines waiting for prices to bottom? You might want to grab a chair and make yourself comfortable. Housing can’t get better with the economy getting worse.
I look forward to some shill exclaiming a year or two from now that since Arizona bankruptcy filing rates are only growing at a ten percent rate, that the economy is in recovery.
“Phoenix is third on a list of housing markets where prices may have further to fall and may not be a good investment any time soon.”
Third? I am thoroughly offended by such a ranking. The Salt River Valley will always be number one in the heart of all Housing Bubble-Bust observers.