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. 

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.