I've been forecasting for a long time about the one-two punch combination our real estate market was going to get hit with - first by the sell-off from the overwhelming number of investors who bought in 2004 and 2005, and then by the foreclosures brought on by the effect of rising interest rates on the large number of Adjustable Rate Mortgages taken out by homeowners over the last couple of years. Well, the first punch has already hit us, leaving our market still reeling with excess inventory of homes for sale. However, early indicators show the Phoenix market might just get lucky enough to avoid the second punch.
Figures released by Foreclosures.com show the comparison of new foreclosures filed from 2005 to 2006. Nationally, the number increased 51% (970,948 in 2006, vs. 641,000 in 2005), with the Southwest leading the way. California was up 94.3% year over year. Colorado was up 55%; Texas was up 35%. Nevada was up 175%, climbing from 8,805 to 24,194 in one year.
Astonishingly, Arizona's foreclosure filings were only up 8.2%, from 20,117 in 2005 to 21,774 in 2006. If this trend holds true, we just might get through the worst of this soft market sooner rather than later. (said with fingers crossed.)
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