2010 will be one for Arizona’s history books- and not in a good way. Record foreclosures, stubbornly high unemployment and falling home prices made for a grim picture: [Hat tip M.R.!]
PHOENIX – Arizona closed out 2010 with a record number of home foreclosures, marking the third straight year of staggering growth for bank repossessions.
From January through November, 65,911 Arizona homeowners lost their houses to the mortgage holder, 12 percent more than were taken in all of record-setting 2009, according to foreclosure listing firm RealtyTrac Inc. Banks and loan companies were on track to take thousands more homes in December.
The coming year doesn’t look much brighter for homeowners, as Arizona’s unemployment rate remains stubbornly high and more adjustable rate mortgages come off low teaser rates. A 50 percent drop in home values from the 2007 peak, and tighter lending standards, are preventing many homeowners from refinancing.
There are those who try and paint a prettier picture for 2011:
But efforts by the federal government to push banks to modify troubled loans should keep the numbers from soaring too much higher, said Daren Blomquist, communications director for Irvine, Calif.-based RealtyTrac.
“We don’t see it a lot worse, but we also don’t see it getting a lot better,” Blomquist said. “We don’t see it getting a lot worse because there are a lot of fail-safes in place to try to keep foreclosures from getting worse. You have all the foreclosure prevention programs, which are having some effect, you have lenders who for whatever reason are much slower to foreclose and aren’t just slamming the market with foreclosures as soon as they get them.”
The evidence though is on the side of the pessimists:
Phoenix-area home prices, after stabilizing in mid-2010, slid again starting in August. What’s more troubling is that banks are taking longer to begin the foreclosure process. Bank of America Corp.’s CEO said recently that in the third quarter, homeowners were delinquent an average of 560 days before his bank began foreclosure proceedings. Normally, 90 days delinquency starts the process, Blomquist said. Also, RealtyTrac’s database shows only about 30 percent of the homes taken by banks this year have been put on the market, leaving a large ‘shadow inventory’ that could hamper price appreciation.
The collapse brought Arizona’s once-booming home construction industry to a virtual standstill. Thousands of foreclosed tract homes are now boarded up, and there’s an inventory of more than 60,000 vacant homes.
RealtyTrac’s foreclosure numbers for Arizona tell the story: In 2006, just 1,196 homes were taken by banks, but that soared to 12,107 in 2007, 50,608 in 2008, and 58,552 in 2009.
If December’s foreclosures reach the monthly 2010 average of about 6,000, more than 70,000 Arizona homes will have been lost to foreclosure this year.
It’s a safe bet that as long as banks have a shadow inventory to trickle out onto the market, there is nowhere for the market to go but down. The only question is how steep the slope. If 2010 was lousy, 2011 is not promising to be any better.
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I SURE CAN’T IMAGINE WHY? Why wouldn’t people not want to stay in a state that arrested 52,000 illegal alien criminals from Yemen and Syria – there were thousands more but those were the ‘bad’ ones.
People killed on their ranches, crime off the map and the media just shut down the story. They can’t shut down the horror that these foreclosed people are feeling though. They are running from the crime and the media doesn’t care, isn’t part of ‘their’ story.
Thank you for some truths from that area…………I thought Arizona had disappeared like the gulf states did. I expect with the complete oil shutdown (jobs)in the gulf that the foreclosure stats there will be out sooner or later………..