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Surge in Distressed Single and Multi Family Homes in Tucson

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By : John Cutts    99 or more times read
Finding distressed single and multi family homes in Tucson as an investor or owner occupant is still a fairly easy task as foreclosure filings continue to rise in the area.

In the first quarter, nearly 4,600 homes were put into foreclosure in Pima County, where Tucson is situated, and nearly 2,000 of these units were already in bank foreclosure listings.

In April, more than 37 percent of total house sales in Tucson were distressed properties, which consisted of 123 foreclosure short sales and 339 REO sales. Closed transactions during April rose by almost 5 percent to 1,227 units, excluding sales that were not represented by members of the Tucson Association of Realtors.

As foreclosures continued to push down prices, the average sales price for all Tucson homes sold by realtors in April was $199,986, down by 0.86 percent from the $201,719 average posted in March. The average list price also dropped from $211,003 in March to $210,291 in April.

Pending home sales also increased by 1.2 percent from 1,549 contracts in March to 1,568 contracts in April. The average sales price for short sales in April was $153,438, a bit better than the average price for REO units, which was $141,857. Existing properties were sold at an average price of $219,658.

A number of local analysts said that the large percentage of underwater mortgage borrowers contributed to the continued rise in single and multi family homes entering foreclosure in Tucson a reality also affecting many other cities.

Reports said that 40 percent of all Tucson home loans are underwater, increasing the number of properties in danger of entering lists of Tucson pre foreclosures and eventually, lists of repossessed homes. With many borrowers taking second mortgages on their homes, rolling closings costs into the loans and making only interest payments, it is no wonder that a huge percentage are underwater.

Local analysts also added that the 40-percent share of defaulting mortgages was much higher in the past, as homes sold through short sales and foreclosure sales are no longer included in the estimates.

The only positive things that can be gleaned from these increases in distressed properties are increased home affordability and market correction. While foreclosures hurt homeowners, they also provide buying opportunities for renters and other families who previously could not afford to buy homes. The process of how to find foreclosed homes for sale is also easier if there are a lot of distressed properties on the market.

Foreclosures are also real lessons for new home buyers, making them more conscientious in handling their finances and in paying their home loans.

Statewide, the number of repossessions and pre foreclosures in Arizona also continued to rise in the first quarter. Filings spiked by more than 22 percent during the quarter to 55,686 postings, accounting for nearly 6 percent of all filings nationwide.

Of the total statewide filings, a total of 21,442 postings involved bank owned single and multi family homes, accounting for 38.5 percent of total foreclosure filings in the state.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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