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Phoenix Foreclosures Reached Record High in 2009

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By : John Cutts    99 or more times read
Phoenix foreclosures reached record high in 2009 as unemployment forced about 41,000 homeowners in Maricopa County to default and lose their homes, according to the Arizona State University W.P. Carey School of Business.

Total home foreclosures in 2009 surpassed foreclosures in 2008, which reached 34,960. Condo foreclosures also increased in 2009, with more than 5,000 units foreclosed.

According to ASU real estate professor Jay Butler, who tracks foreclosures using county foreclosure records, said that over 35 percent of sales of existing homes in the county in 2009 were foreclosure sales. He added that the percentage was an extremely high figure.

In December, the Phoenix area posted over 4,000 foreclosures, up from about 3,000 filings in November. Foreclosure sales accounted for an overwhelming 67 percent of total home sales in the area.

Butler said that the volume of foreclosure sales and auctions in December showed that the crisis is not ebbing. The continuing job losses will worsen the housing situation. The expected rise in mortgage rates and the still weak economy are additional negative factors impeding recovery.

Despite record Phoenix foreclosures, home prices were fairly stable, according to Butler. The median price for single-family homes in December was $140,000, just a little lower than the $143,000 median in November. The median in December 2008 was $146,000.

Because of the apparent stability of the prices, Butler said he is optimistic that recovery will start this year.

In contrast, housing analyst R.L. Brown, publisher of the Phoenix Housing Market Letter, has doubts about recovery this year. He said that unemployment and the resetting of adjustable-rate mortgage loans will force more homeowners to default.

However, Brown added that politicians conscious of their election prospects in November may think of some ways to pressure lenders to reduce loan balances and lengthen repayment periods in order to be more popular with voters.

Brown explained that housing recovery is more difficult in Arizona than other states because a lot of jobs in the state are linked to real estate. He said that the state needs to restructure its economic base and find a stronger engine of growth.

In another report on foreclosures which includes VA repossessed houses, Arizona ranked second in a listing of states based on foreclosure rates in 2009, with a rate of 6.1 percent. More than 163,000 foreclosures were posted in Arizona in 2009.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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