2009: The Year of Foreclosures
February 05, 2009
Phoenix has been hit hard by the overheated market and 2009 will be a continuation of the down market cycle.
In early 2008 I remember looking at the data and being stunned how quickly and how much of the market was dominated by lender owned sales: that was when some 40% of sales were bank owned.
As 2008 progressed that percentage grew. It grew because there was a larger supply of lender owned homes and it grew because these homes were more competitively priced then normal sales.
The most recent data shows that 68% of residential properties sold were lender owned. During late fall and early winter there was a moratorium on some foreclosures but this simply delayed that process. It has since moved forward.
Notices of Trustee are increasing. 251 the 5th week of 2009, up from 237 the 1st week of 2009.
Pending Foreclosures are increasing, they were at 33,080 the 4th week of 2009 up from 14,418 the fourth week of 2008. That's for all real estate, no matter what type.
Trustee sales are increasing as a result of the two above. Then, this is all followed by the glut of bank owned homes for sale, those homes that did no sell at the trustee sale auctions, that no one purchased because of price: they are all coming back cheap because the new owners, the banks, don't want them and they price then to sell, depressing prices further.
The jobless rate just recently began to increase and there is a delayed reaction to the resulting inability to pay for the home and the resulting foreclosures. The unemployment rate continues to increase and in fact is higher then what the government agencies state because some people simply quit looking and many more people are working less hours, less days and part time.
In addition there are a lot option arms and other arms resetting this year.
All this is going to result in more homes lost to foreclosure but found by new homeowners.
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