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County foreclosures soared 171 pecent in 2008
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Foreclosures in Maricopa County jumped 171 percent last year compared to 2007, with Chandler, Gilbert and Mesa among the hardest-hit cities.
Tim Hacker, Tribune
Foreclosures in Maricopa County jumped 171 percent last year compared with 2007, with Chandler, Gilbert and Mesa among the hardest-hit cities.
Search for foreclosures in the East Valley
That's according to a new report by Default Research, which provides foreclosure information on the Valley and Tucson. The number of foreclosures in Maricopa County increased from 22,426 in 2007 to 60,860 last year.
Mesa had 476 foreclosures last year, while Chandler had 227 and Gilbert had 208.
"Prices were really inflated compared to the incomes people were receiving, and their only options to buy were using creative financing," said Serdar Bankaci, Default Research founder. "When the prices stopped going up, people weren't able to refinance to get money out of their homes to cover their loans, and then there was the resetting of mortgage interest rates. The drop in prices has led to a large inventory of homes, plus you have the foreclosure homes in that pool."
About 4 percent of households in the county are in foreclosure.
Among the 10 states that Default Research monitors, Arizona was on the high end in terms of homes in foreclosure in 2007 and early 2008, Bankaci said. It is now behind California and Florida in the severity of the foreclosure crisis, he said.
"I feel like your market has maybe gone over the hump and it's starting to stabilize itself through the bubble," he said. "Maricopa (County) was hit pretty hard early on in the foreclosure crisis. So I think it's just a matter of leveling off. A lot of the new home building has stopped or has slowed significantly, which obviously ... helps out the housing market there."
The market should improve by the third quarter, Bankaci said.
"In your area, we might start to see a decline (in foreclosures) by the end of the year," he said. "You're looking at probably 2.5 percent of households in foreclosure, which is a historical average."
Gilbert real estate agent Tra Bell said the prevalence of foreclosures has created a dismal market for sellers across the East Valley.
"I've talked people out of selling their homes," he said. "They have to be OK with staying in their home for another four, maybe five years in order to sell it at the price they want. We're going to have another year or two of this type of market, and then it's going to take another year or two for it to come back up, and then another year for it to get back up to that price range where they're able or willing to sell."
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