The problem of huge supplies of foreclosed land and homes in Arizona might start easing up by next year. At least, that is what most state residents, officials and industry observers are hoping for. The positive sentiment was largely buoyed by the decline in the percentage of mortgages that are underwater in the state.
Phoenix foreclosures for sale and distressed property numbers all around the state have been some of the highest in the whole country. For the 2010 third quarter, almost 50% of homeowners in the state are holding underwater mortgages or loans that are worth more than the value of their properties. Nationwide, Arizona ranks second in terms of negative equity or underwater loans.
Around 49% of property owners in the area have underwater mortgage loans and are facing threats of foreclosures in Arizona. The good news, however, is that Arizona also recorded one of the biggest declines in underwater loans for the July-September 2010 period, with the state posting percentage points drop of 1.4. This ranks the state third behind Alaska which recorded a decline of 1.8 and Nevada with 1.6 points.
In addition, the 49% of Arizona is a far second to Nevada's 67% for the quarter. Most real estate market observers are optimistic that this will help the state cut down its residential foreclosures and foreclosed land numbers starting next year. Although a quick recovery is practically impossible, analysts stated that any improvement in the Arizona housing market is welcome news.
Furthermore, since underwater mortgages are main factors in preventing the market from recovering, improving numbers will mean a better chance for an area to mount a sustained recovery. Housing industry analysts are hoping that the decline in the percentage of negative equity will also herald a decline in the number of foreclosure houses listings as owners abandoning their properties will likely become fewer.
For the period July-September 2010, Arizona had a total of 648 mortgages that are worth more than the property they support. The figure is out of the total 1.33 mortgages recorded in the state. Arizona also has over 63,000 mortgages that are nearing the negative equity level. Despite the big numbers, most market observers feel that 2011 might just be the year that the state will start recording fewer foreclosed land and residential foreclosures.
For over 10 years, John Evan Miller has provided exceptional information on the foreclosure market.
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