Foreclosures In Arizona Have Officially Spread To The Heart
Foreclosure has usually been a problem in the newer outer areas of Phoenix. Cities that are new or had new development that sprawled further and further away from infrastructure, jobs, and paved roads.
Many who bought late in 2006 got bit by this when home prices started to fall, incentives and discounts got larger at new home sales offices, and mortgage rates started rising. Add to that fact that real estate simply wasn’t selling at all and you get a perfect storm for a recession/depression.
Though we’re waiting on the latter, it doesn’t appear that you can stop foreclosure just by living in an established neighborhood anymore. It seems that the metro areas have now been hit by the struggling economy, and hit hard.
Metropolitan Phoenix’s foreclosure problem has spread. Many Valley neighborhoods closer in, particularly in south, west and central Phoenix, now have the highest foreclosure rates, according to an Arizona Republic analysis of real-estate data from the Information Market.
Foreclosures across metro Phoenix number 16,647 for the first half of the year compared with 9,966 during all of 2007 and 1,070 in 2006.
Last summer, when foreclosures were just starting to climb, the highest rates of home defaults were found on the Valley’s more affordable fringes. The problem worsened, hitting a wider swath of homeowners who bought at the peak of the housing boom through subprime loans. Although some of the Valley’s fringe areas such as Surprise, Anthem and Buckeye continue to have high foreclosure rates, the problem has moved inward.
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Many of the homes going into foreclosure were bought or refinanced during the peak of the housing boom in 2006, according to property records. Home prices are down almost 30 percent from that time, so many people struggling now owe much more than their home is worth.
Now with Phoenix ending its “peak” season, it doesn’t look good for real estate agents. It looks even worse for those trying to sell who haven’t sold and need to in order to avoid foreclosure, bankruptcy, and the credit card debt that seems to be growing larger every month.
The article’s best quote, I thought, was:
“It has become more of an equity problem than a subprime problem”
Indeed it is. For the first time for almost a decade, many are upside down on an already sinking ship.
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