A new Arizona State University report authored by Assoc. Professor Jay Butler shows that Valley foreclosures were down last month as reported by the Arizona Republic. However, the number of late payments and defaults makes it unclear whether or not the trend will continue.
Foreclosures were down to 33% last month from 40% in March.
“We’re sort of at a break point,” Butler said. “Are we now going to see foreclosures decline, or is it simply for other reasons this is just a respite and we’re going to see an increase? Because we’ve not been here before, it’s hard to say which fork in the road we’re going to take.”
Butler points out a few concerns that continue to affect the market:
- Record levels are still reported on late payments and defaults
- Income may not increase enough for people to hold onto their current homes
- Adjustable rate mortgages could negatively affect those who are barely making it now
- In areas where neighborhood values are declining, more people may be inclined to walk away from their homes
Butler also noted that Arizona’s new immigration law may have affects on housing as well.
Still, there is hope yet:
- The number of foreclosure filings fell in last month to the lowest they had been since July 2008
- Foreclosures dropped to 4,090 – the lowest since November 2009
Unfortunately, foreclosures combined with the sale of homes that were previously in foreclosure still makes up 60% of recorded market activity, and 42% of sales were foreclosure sales.
The market is less busy but higher-priced this spring than last spring, the report shows. The number of homes resold was more than 6,400 in May. That’s down from almost 6,800 in April and almost 7,000 the previous May. The median single-family home price for resold homes $144,000 in both April and May, significantly up from $130,000 May 2009.
Foreclosures last month were down to 3,200 from 3,500 in April, but were slightly up from around the 3,000 reported in the same time last year.
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