In one of the epicenters of the foreclosure crisis, the tremors are evidently not abating.
According to a new report by Arizona State University, foreclosures accounted for 46 percent of existing-home sales in the Phoenix area last month, the highest such figure this year.
Amidst news of a bank foreclosure moratorium and multi-state investigation into lenders and their paperwork, the September figures add to the uncertainty in the local housing market, said Jay Butler, ASU associate professor of real estate.
"The market is fairly fragile to begin with," Butler said. "And when there is uncertainty, the natural response for consumers is to withdraw. That's going to have some implications."
According to the ASU study, the number of existing-home foreclosures in September was 4,110.
A reason the foreclosure rate has risen is a decline in existing-home sales since the federal home buyer tax credit expired at the end of April. According to Maricopa County data provided by The Information Market, a Glendale real estate research firm, total sales fell from 8,949 in April to 6,653 in September.
(The Information Market does not include foreclosures in its total-sales numbers.)
As a result, inventory remains bloated, and homeowners who have already seen their property values tumble might have to endure further declines. The median home-resale price in September in Maricopa County was $122,500, a decrease of $7,500 from a year ago.
"We had talked in the last 18 months about an established bottom, but we see things moving down now," said Tom Ruff, analyst for The Information Market. "The number of bank-owned properties is increasing, and that is going to put a downward pressure on pricing. We called the bottom of the market in April 2009, but our opinion is that things are going to go below that."
There were 20,430 bank-owned properties in Maricopa County in September, a increase of almost 6,000 since January, The Information Market data indicates.
The Arizona Attorney General's Office is keeping close watch on foreclosure numbers. This week, the office announced that it will join the other 49 states in an investigation of mortgage servicing companies and their documentation.
At this point, it is impossible to determine the effect of such lender practices as "robo-signing" - employees who sign hundreds of foreclosure documents a day without reviewing them - has impacted the local and state market, said Steve Wilson, spokesman for Arizona Attorney General Terry Goddard.
"Arizona has been among the leaders (in foreclosures) nationally for a while, so this latest surge is no surprise," Wilson said. "But it would be premature to make any estimate on what effect (bank practices) are having on that. We have just started the process. We sent letters last week to mortgage-servicing companies in Arizona, asking for the information that will be a starting point for us."