Almost half of Arizona home sales are foreclosuresPosted: Updated:
PHOENIX – Ariz. - RealtyTrac has been crunching the numbers and in the first quarter of this year foreclosure sales accounted for 45 percent of all residential sales in Arizona.
The state was just edged out by California and has the third highest percentage in foreclosure sales in country.
New York had the lowest, just under seven percent.
According to RealtyTrac, the foreclosures in Arizona are selling at a discounted rate of 25 percent less than other home sales.
As painful as that is for your home value in the short term, there is a long-term benefit.
Daren Blomquist, director of Marketing Communications at RealtyTrac, explains, "It means my home value might take a hit but it also means I am getting someone in that house, in that neighborhood who can afford it and will start mowing the lawn and start taking care of the property."
Matt Warfield, a guideline expert in the mortgage industry, sees a few positives in this latest report, most importantly being the number of overall home sales.
Arizona is averaging 10,000 homes sales per month. Warfield says, "The number of sales gives you a picture of the number of people now in the market trying to buy houses and when that number is significantly higher than the year before and it’s only rivaled most recently by 2006, that’s very positive for Maricopa County’s economy and the recovery of the housing markets."
However, the high percentage of foreclosed home sales will keep housing prices low for a while and, because of the large amount of so-called shadow inventory being held onto by the banks, it will take Arizona close to two years to get those foreclosed properties off the books.
"Which is actually good news for Arizona,” according to Blomquist. Arizona is doing better than the national average of three years to clean up the foreclosures.
“Although it’s one of the sates that’s been hit hardest by foreclosures, we are also seeing the most activity in terms of sales so that will clear the inventory quicker in Arizona than some of the other states."
Blomquist points to research that shows home prices have bottomed out. They are not expecting another dip. However, RealtyTrac is predicting that prices won’t start a drastic climb back up until around 2014.
For people trying to weather this economic storm, Blomquist recommends they take advantage of the low vacancy rate. Renting property could keep them afloat.
Matt Warfield points out, that if you are facing foreclosure try to at least short sell your home. If you are current with your payments, you can actually go out and buy a new home the next day. If you start missing payments or your home is foreclosed on… that could set you back for 3 to 7 years.
Although, these foreclosed properties are selling for a discounted rate 25 percent lower than other home sales in Arizona, that number jumps to 37 percent in Maricopa County.