Foreclosures continue to rise in Arizona and across the nation — while foreclosure sales have jumped as buyers with cash snap up bargains.
Sales of foreclosed homes in the metro Phoenix area made up nearly half of all existing homes sold in the area last month, a new study shows.
Of the 7,505 resale-home transactions recorded in Maricopa County in August, 44 percent were bought out of foreclosures, according to the realty studies department at Arizona State University. That's a 2 percent increase from July and more than double the 20 percent of sales recorded in August 2007.
There's no end in sight for the housing slump, said Jay Butler, director of realty studies at ASU's Polytechnic Campus in east Mesa.
"Most potential buyers still confront a weak economy, slumping levels of confidence and tighter underwriting guidelines," Butler said. "The local housing market still contains considerable uncertainty over when any potential strengthening can be expected."
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The federal government's takeover of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. (Fannie Mae and Freddie Mac) has driven mortgage prices down, while bad economic news is keeping buyer sentiment low, Butler said.
The median price of a home bought out of foreclosure in August was $161,875, compared with a non-foreclosure price of $193,550. A year ago, the median prices were $220,010 and $258,000, respectively.
Prices varied widely by location. In north Scottsdale, the median price in August for a foreclosed property was $545,000, while the regular market was $525,000. In the Maryvale area of west Phoenix, regular transactions were $98,000 and foreclosures were $123,580.
The steep drop in prices is beginning to bring out investors expecting to see prices rebound in the next few years, Butler said. Interest is especially high in lower price ranges because more capital is available for those homes, he said.
Meanwhile, Arizona's foreclosure rate is still among the highest in the nation, according to the most recent report from data firm RealtyTrac Inc.
The company's August report showed that foreclosure filings were up 7.36 percent from July and 62.6 percent from August last year.
Nationwide, foreclosure filings in August increased 27 percent compared with the same month a year ago, a significantly slower pace than in previous months, according to RealtyTrac data.
The rate of filings for the month was one for every 182 households in the state, the third-highest in the country.
The highest rate was in Nevada, which had one filing for every 91 households. California was No. 2, with one for every 130 homes. In fourth place was Florida, with a rate of one filing for every 194 homes.
Nationwide, 303,800 homes received at least one foreclosure-related notice in August, up 12 percent from July, RealtyTrac said. That means one in every 416 U.S. households received a foreclosure filing last month.
August's nationwide increase, however, was smaller than those in the two prior months. June and July both had year-over-year increases in foreclosure filings of 50 percent or more. The total number of foreclosure filings is still the highest since RealtyTrac began issuing its report in January 2005.
Irvine, Calif.-based RealtyTrac monitors default notices, auction-sale notices and bank repossessions. Nearly 91,000 properties were repossessed by lenders nationwide last month — more than double the 43,141 of August 2007, the company said.
By the numbers
62.6%
Increase in Arizona foreclosure filings in August from August 2007
27%
Nationwide increase, same period
44%
August foreclosure sales as percentage of all sales in Maricopa County