The Arizona Republic
The Valley’s foreclosure wave swept inward in 2009, moving from younger communities at its outer edge toward older, wealthier and more centrally located areas.
The hardest-hit community by far was in west-central Phoenix, where foreclosures in two ZIP codes, 85017 and 85019, accounted for at least 72 percent of all home-resale transactions – about 1,070 sales out of 1,315, according to the latest Valley home-values data from The Information Market. The previous year, foreclosures accounted for about 60 percent of the area’s sales.
Housing-industry groups such as the National Association of Hispanic Real Estate Professionals say that unscrupulous lenders continued to push predatory, subprime loans in west-central Phoenix well into late 2007 – months after mortgage brokers in other areas had discontinued their use.
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Real-estate investors, who once fueled a run-up in home values, now helping stabilize market
By J. Craig Anderson
The Arizona Republic
For decades to come, participants in the Valley’s housing economy are sure to remember 2009 as the Year of the Investor. Few of the roughly 79,000 Maricopa County home sales that closed in 2009 were more than a degree of separation away from investor activity, and even those exceptions were influenced in some way by investors’ presence in the market.
Thousands of individuals and institutions with dollars, deutschemarks, dinars or yen to spend began buying up homes in the Phoenix area after learning of an unprecedented spike in lender-initiated foreclosures that was clearing families out of starter-home subdivisions as quickly as deferred-payment plans and zero-down financing had ushered them in a few years earlier.
In 2009, investors had both hands on just about every housing-market mechanism.
They competed with first-time buyers for heavily discounted “real estate-owned,” the lenders’ term for recently foreclosed-on properties. They enticed renters out of nearby multifamily projects by providing detached-home living at apartment prices, to the chagrin of apartment owners.
Investors often dictated terms of the foreclosure process itself, because in many cases they had purchased bank notes entitling them to the remaining proceeds from the multiple thousands of subprime, adjustable-rate, interest-only and no-documentation-required loans that banks had approved and then sold off to the securities market.
Many critics have said they think investors are largely responsible for the irrational run-up in home prices, irresponsible lending practices and the slicing, dicing and selling of mortgage loans that once were held continuously by banks and guarantors such as Fannie Mae and Freddie Mac.
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Home values in Phoenix metro may fall again because of ’shadow inventory’
By Catherine Reagor
The Arizona Republic
Phoenix area home prices could experience another drop in value because of tens of thousands of properties that could flood the market in 2010.
This shadow inventory, located across metropolitan Phoenix, is threatening the recovery of the real estate market and overall Arizona economy.
It includes an unknown number of pending foreclosures, bank-owned homes bought at foreclosure auctions by investors who might try for a quick sale, thousands of homes foreclosed on by banks that have not yet put them up for resale and homes that will go into foreclosure after their owners abandon them and walk away from their mortgages.
The housing market has an inventory of homes for sale. But the shadow inventory is the number of additional, bargain-priced homes that could be added to the market anytime this year, a number of homes beyond any regular turnover in home ownership. These new listings – most tied to foreclosures – could flood the market and further drag down values.
Economists and housing analysts are worried that if this inventory of what would become bargain-priced homes enters the market in the coming year, it could cause another drop in home prices in Arizona. Phoenix home prices began to tick up during the second half of last year after recovering from the first round of cheap foreclosure homes dumped on the market.
California, Nevada and Florida also face an oversupply of shadow inventory.
What also concerns market-watchers is that no one can accurately predict how big the shadow inventory is or when any of these houses will hit the market.
Shadow inventory is the most feared and misunderstood term in the real-estate market now, even more than “bubble” during the housing peak.
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