Foreclosure Rates Up for Single Family Homes

What is happening on the foreclosure front for the Metro Phoenix area and Scottsdale. As inventories continue to decline, less and less homes available for sale are foreclosures. Why is this happening? Maybe it is the delayed effect of the “Robo Signing” fiasco. Who knows for sure. We are now seeing foreclosure rates increase for the metro Phoenix and Scottsdale real estate markets.

August foreclosure increased by 13% from July in the metro Phoenix and Scottsdale real estate market. However, August of 2011 saw 28% less foreclosures than in August of 2010. Even with higher foreclosure rates in August of 2010, inventory levels continued to decline.

The median price of single family homes in metro Phoenix continues to decline. Down 4% from last month and down 11% from last year. One big reason for the drop in median prices is that investors are snapping up ALL properties under $100,000. Last year, short sales under a $100,000 were not worth all the efforts. This year, with foreclosures in the lower price ranges getting multiple offers within hours, investors are willing to buy and wait on short sales in the lower price ranges. This would help drive down the median price.

Or maybe the press inflicted double dip in the real estate market is responsible for the drop in median price. I say press inflicted because based on supply and demand, demand increasing and supply decreasing, there was no reason for the drop in prices experienced in the metro Phoenix and Scottsdale real estate market at a price point under about $200,000. For several months now, list a home priced at the comps under $200,000 and you will receive multiple offers. A good Realtor will work those offers to increase the market. However, many agents don’t know what’s happening and they just accept an offer. Do they fear appraisals? Or are they not willing to do the work required to increase prices. I am not sure.

Here is an article from AZ Central:

Foreclosure Rates Up for Single Family Homes
The Phoenix area’s foreclosure rate for detached, single-family homes increased in August, following a seasonal trend that has repeated itself each year since the foreclosure crisis began, according to an Arizona State University report issued Monday.

The report, from ASU’s W. P. Carey School of Business, said 31 percent of existing-home transactions were foreclosures in August, compared with 29 percent of transactions in July.

The increase came after several consecutive months of decreases in the area foreclosure rate, the report said.

Still, W. P. Carey Professor Emeritus Jay Butler said the reversal in August follows a recurring, yearly trend.

“The uptick in foreclosure activity was not entirely unexpected, since we’ve seen a pattern of upward movement in this rate in the latter months of a year over the last few years,” said Butler, who wrote the report. “The weak economy and income growth are probably leading to more people giving up on their homes.”

There were 2,860 single-family home foreclosures in Maricopa County in August, compared with 2,525 foreclosures in July and 3,990 foreclosures in August 2010.

Home resales, including short sales and sales of bank-owned homes, totaled 6,390 transactions in August, the report said, compared with 6,110 transactions in July and 4,800 transactions in August 2010.

The median sale price for an existing, single-family home in August was $120,000, down from $124,900 in July and $135,000 in August 2010, according to the report.

In recent months, homes valued at or below $100,000 have been selling almost as soon as they hit the market, while demand has nearly disappeared for homes priced above the Federal Housing Administration-guaranteed loan limit, currently $346,250 in Maricopa County.

One key reason is that at least half of all recent home purchases have been made by investors looking to renovate and lease out the homes they buy to generate monthly income. Such investments have the greatest profit potential and pose the least amount of financial risk at the low end of the market, investors said.

Meanwhile, lenders have been reluctant to approve mortgages above the limit for FHA guarantees, fearing greater losses if the loans were not repaid.

Read more: http://www.azcentral.com/business/realestate/articles/2011/09/12/20110912foreclosure-rates-up-single-family.html#ixzz1Y2Ss8aUI