As we near the end of the first quarter of 2011, it looks like this market could be getting back to normal in the near future - at least for the short term. In the Phoenix Metro Area, foreclosure filings have been down significantly, which can only help stabilize the buyers market for the time being.
Although foreclosure filings are down, there is reason to believe that might not last very long. With looming ARM’s that haven’t adjusted and a hefty shadow inventory, Maricopa County should keep delivering consistent foreclosures. Not to mention Arizona is a non-recourse state, so the penalty is significantly smaller for homeowners who want to walk away from their underwater homes.
As of March 2011, the median sales price in Maricopa County is $120,100 according to the Cromford Report 2011. February’s sales volume was 6,535, which is up from January’s sales volume of 6,182.
It is always difficult to predict the supply in this market with the amount of shadow inventory looming. The number of homes that are in default but haven’t received a notice of foreclosure could be in the tens of thousands. Certain banks will allow long default periods before they file a notice of foreclosure, so the resulting problem is shadow inventory that is very difficult to calculate. The above graph shows the inventory that is currently on the market and projects the supply timeline assuming no additional foreclosures enter the pipeline.
So for now, investors can enjoy historically low prices and a very healthy rental market. We see a daily 'feeding frenzy' of investors capitalizing on these opportunities every day at the trustee sales. Contact us to see how you can get involved or if you have any questions!
Until next time,
Casey Block
Comments(1)