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Real estate experts are saying investors and speculators started the foreclosure crisis, but it has now spread to the average homeowner according to the Chandler Republic article dated July 23, 2008.

For the month of June, 40% of Mesa, 27% of Chandler, and 20% of Tempe recorded home sales were foreclosures.  It is estimated that three-quarters of all homes being purchased are foreclosures.  This is mainly due to their lower price compared to resale and new homes, and buyers looking for good deals because they know they are out there.

Jay Butler, Director of Real Estate Studies at Arizona State University says there is a change from investor-driven foreclosures to owner occupied, due to the economy.  The Arizona economy has lost 26,000 jobs in comparison to last year.  An even bigger reason for people walking away from their homes is that they cannot envision making money off their home for at least five years, and they don't want to continue making payments on a house that has lost $50,000 - $100,000 in value.  One additional reason for the increase in foreclosures was when lenders like Countrywide ran into financial problems and became more aggressive in collecting delinquent accounts. 

 East Valley Foreclosures

For more information regarding foreclosures in Phoenix, Arizona, please visit another recent blog of mine called Foreclosures Spreading Inward.

The east valley has experienced an increase in home sales because of the foreclosures, but with 50,000 homes on the market, and the number of foreclosures still on the rise, things may get worse before they get better.  It is estimated that the current foreclosure problem is so bad, it will likely exceed the economic downturn generated by the September 11, 2001, terrorist attacks.

 

 
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3 Comments on East Valley Foreclosures and why they are increasing

JUL
30
2008
365,402 Points 4 Featured Posts Outside Blog

I've asked our MLS board to report short sales and foreclosures to us as well - your post reminded me to give them another call - it's great you are keeping tabs on the pulse of your marketplace Troy- hopefully the new bill signed into law will help some re-fi and keep them homeowners!

Sincerely,

Grace

12:39pm • #1
JUL
31
2008
AUG
01
2008
168,217 Points 2 Featured Posts

Grace - Thanks for the good thoughts, and I would be interested to know what your market is like in Indiana.

Rene - Maricopa is not doing well at all.  Of course their troubles started long before the troubles began in the suburbs because they are were more rural (Businesses are growing).  As early as the end of 2005, investors were gone, and home values were dropping in Maricopa.  Not sure the number of foreclosures, but I know they have been dealing with them in Maricopa for a longer period of time.  Problem is, not many people are moving to Maricopa, Casa Grande, and Queen Creek, but people are still moving to Chandler, Gilbert, etc.  I know a lot of people who originally moved out of the Chandler/Gilbert area to a new home in Maricopa, only to move back to Chandler/Gilbert in less than 2 years.

3:40pm • #3

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