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Homes in Bank Owned Property Listings Create Problems for the Market

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By : John Cutts    99 or more times read
Several real estate experts and analysts have looked into Phoenix housing market, 5 years after the area started experiencing the fallout from the mortgage crisis which lead to the ballooning of bank owned property listings. According to these experts, it is about time to acknowledge that the future holds a new reality and it should be accepted as early now that the term “recovery” will never be appropriate.

There are actually three notable characteristics of the present day market which could explain why these experts are painting such a grim picture of the future.

For starters, there are more individuals and families renting than owning homes. This could be explained by the surge in the volume of Phoenix bank owned homes over the past couple of years. Distressed homeowners losing their homes to foreclosure usually end up renting a home, especially after their credit score took a beating.

Another factor would be the hundreds of underwater homeowners, meaning they owe more in mortgage than the current market value of their home. If these homeowners eventually decided to walk away or stop paying their mortgage, the home will more likely end one of the Phoenix bank owned homes.

Lastly, residential developments which lost money due to the risks they took in building so many homes during the housing boom will no longer be able to recover. Again, this will lead to the growing number of bank owned property listings.

With regard to home prices and home sales activity, the first sign of a problem was observed during the mid-2006 when the collapse of the Arizona market started gaining momentum. Foreclosed properties in bank owned property listings suddenly became the norm rather than the exception. In no time at all, Arizona bank owned properties for sale became the trend in the market.

To make matters worse, there were also plenty of commercial foreclosure homes for sale, mainly due to the fact that even business owners took out adjustable-rate mortgages and where unable to pay the mortgage dues when the loan reset. Many of the homes listed in bank owned property listings actually have a similar story.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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