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Homes Discounted by 33% Drive Phoenix Foreclosure Investing

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By : John Cutts    99 or more times read
Phoenix foreclosure investing in homes sold off at substantial discounts is a good proposition for real estate investors.

In the northeastern parts of Phoenix, where home prices have declined by 17 to 33 percent in 2009, investors can make profits if they make the right purchases. These areas cover neighborhoods between the Pinnacle Peak Road and the Phoenix Mountain Preserve, which previously were holding up despite the recession.

According to the Arizona Association of Realtors, the 17- to 33-percent price discounts in 2009 marked substantial increases from the 10- to 20-percent discounts in 2008. These price declines, however, also pushed more home sales in 2009.

Over 2,500 homes were sold in 2009, up from the 2,000 units sold in 2008. According to the realtor association, a large portion of the sales were from Phoenix foreclosure listings and short sale lists. In zip code 85032, foreclosed properties made up half of total sales.

Holly Eslinger, head of the realtor association, said that Phoenix is still a tough market for sellers as actual foreclosures and pre-foreclosures in Phoenix continue to push down prices and make the competition fierce for sellers.

The low prices, however, are advantageous to people engaged in Phoenix foreclosure investing. They can snap up bargain properties with cash and rent them out while waiting for prices to rise.

In 2009, more than 900 units sold in northeast Phoenix were foreclosures, up from 346 units in 2008.

According to real estate professor Jay Butler of the Arizona State University, the results of loan modifications do not show immediately in foreclosure reports, so pre-foreclosures are still surging. Additionally, economic conditions are still weak, preventing homeowners from recovering from their financial difficulties.

In another report from ASU, real estate professor Karl Gunterman explained that house prices are still declining, but the pace of decline has dropped. He contended that prices may be nearing their bottom levels after continuously declining for 33 months.

Gunterman added that home prices in the Phoenix metro area have fallen by a total of 47 percent since the middle months of 2006. He also mentioned that the decline in prices of nondistressed homes is no longer caused only by lower-priced foreclosure homes, but also by the continuing economic hardship.

While analysts said that the northeast part of Phoenix may lag in recovery because of sharp price declines, people focused on Phoenix foreclosure investing may find properties in this area that show great prospects for profits.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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