What Has Been Seen…

First the Dow drops almost 10%, then rebounds a bit, then comes Monday and we’re back down over 500 again. When it rains, it pours. The same can be said for the housing market as it tries to lift itself on wobbly legs. Granted, we’ve added more wobbly legs through artificial supports, but wobbly legs are wobbly legs and nothing is going to change that.

To wit, Arizona just broke a record for the number of foreclosure notices in September. Expect many more foreclosure stories to come.

One dreary week in September set a new record for foreclosure notices in Maricopa County, with 2,210 notices outpacing sales in a three-county region, according to a Mesa data company.

“It was a record buster,” said analyst Zach Bowers of Ion Data in Mesa, which tracks the notices.

“We’ve been averaging 1,700 to 1,800, and that (week) just kind of caught us off guard,” he said.

The record, which includes residential and commercial foreclosure notices, came Sept. 15-19, for an average 442 notices a day.

Unless the people receiving the notices are able to work out their finances, the notices likely will become foreclosed properties by January.

That indicates the number of foreclosed properties in January could be double the 3,295 tracked by Arizona State University across the county in August.

A comparable week in mid-September last year saw just 758 notices total, about one-third the number during the record week.

The previous weekly record came June 9-13, Bowers said, when 1,915 notices were filed.

Making the foreclosure figure even uglier, it outpaced total affidavits of sale in the county for the same week (1,551) and even the total combined sales in Pima, Pinal and Maricopa counties (2,063), according to Ion.

Last month, the U.S. Department of Housing and Urban Development announced Arizona would get $121 million to help areas blighted by foreclosures, but officials are doubtful even that large sum will mitigate the growing problem.

The problem here though, isn’t that states need money to keep afloat. The problem is that the problem is not known. If you hang up a dartboard on a wall, turn off the light, turn around a couple times, and start throwing darts… How many bulls-eyes do you think you are going to hit?

We can’t turn off the lights, go in sight unseen (ironic that those two words are responsible for many of the investor purchases that helped explode this bubble), and start throwing invisible US Dollars at the problem. Especially if we are suggesting amounts which equal bandaids on severed limbs.

But I only seem to be preaching to the choir on that one:

“Is it enough? No, it’s not nearly enough compared to the magnitude of the problem,” Arizona Department of Housing Director Fred Karnas said.

“We need to look at this (funding) as one more tool to address foreclosures, along with the things we are doing with housing counseling, and getting people to talk to their lenders.”

The department will use the funds to buy foreclosed homes and preserve the value of neighboring properties that might otherwise be dragged down as the foreclosed properties languish.

But we’re already seeing the effects of these properties blighting the neighborhoods around us. Copper thieves are coming into suburban areas and increasing crime, also loading up on other metals and items that can be sold for scrap for cash.

What can you do if you’re going through or about to go through a foreclosure? A call to the Arizona Foreclosure Prevention Hotline may be able to help you. In other words, I wouldn’t sit and wait for a senator to save you.

“We’ll see if we can improve the quality of life for people that have been able to hold onto their mortgages and are still living in their home, but are now seeing more crime and such in their neighborhoods because of foreclosures,” Karnas said.

Struggling homeowners hoping to avoid foreclosure can call the state’s foreclosure-prevention hotline at 877-448-1211.

To give some additional perspective, one commenter broke it down a bit further:

To flesh out the numbers, there were approximately 4500 foreclosures in September, and 7500 Notice of trustee sales.

Both of these were records.

According to the MLS, we had about 6200 sales in September. However, DPA (downpayment assistance) disappeared October 1, so it seems many buyers were rushing to beat the deadline. I would expect sales to drop strongly for October to January, and foreclosures to keep rolling in.

Prices dropped almost 1% month over month, and the number of bank owned homes on the MLS went up by about 1000. So, even with a 1% monthly price drop, it was not sufficient to keep the bank owned home level even. Expect price drop to accelerate over the next few months.

This is going to get worse, before it gets better. When will it get better, though? We’ll have to turn on the lights for that one.

Monday, October 6th, 2008  |  Visited 5,034 times  | 

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