Shadow Inventory in the Phoenix Metro Area/Maricopa County

Shadow Inventory in the Phoenix Metro Area/Maricopa County -           

 

Frequently, I'm asked about "shadow inventory."  There still isn't a clear answer, but our foreclosure statistics provide some hints as to what is happening. 

 

In Western States, such as Arizona, attorneys aren't used in the foreclosure process and we have Deeds of Trust, not mortgages, and our timeline for processing foreclosures is much shorter than states on the East Coast.  States on the East Coast have foreclosure proceedings that drag on much longer (years), not months as is in Arizona.  Here in Arizona, our time line is as follows:

 

Notice of Default (NOD) is issued to the homeowner after 3 missed payments, usually at the end of the 3rd month.  The NOD will provide a date that the home will go to the Trustee's Sale, usually 3 months later. There are circumstances wherein that 6 month date can be extended, but it's at the bank's discretion.

 

Either way, the process is much quicker in Arizona, which will help our foreclosure market to progress much quicker than other states. This article details the drawn out process in Iowa, one state that has an estimated 70,000 homes in shadow inventory. 

 

So, given the fact that the foreclosure process is much quicker in Arizona, our shadow inventory "situation" isn't nearly as bad as other states.  It's tough to define what our shadow inventory actually is, but estimates show it to be closer to 15,900 homes. 

 

If you compare Des Moines' population of approximately 500,000 vs. Phoenix Metro Area population of about 4,000,000, you tend to believe that we aren't in as much trouble as that city! 

 

These are some interesting statistics for anyone curious about how our foreclosure market is doing:

 

 

 

 

 

 

 

  Loan origination date is the date the loan began.  This clearly shows us the decline of the housing market by quarter.