Monday, January 17, 2011

Ariz. housing bust tests smaller towns

KINGMAN -- For Roxanne Knoche, losing the ranch she had custom-built for her retirement would be devastating.

A 53-year-old former office manager for a Costa Mesa, Calif., plumbing company, she moved in 2007 to Kingman, where she lived off disability payments until they ran out a year later.

After more than a year of trying to negotiate a modified loan with Bank of America, seeing her house in Golden Valley advertised as a foreclosure and shooing away people dropping by to see the corner-lot property, Knoche was preparing for another move.

"I would have had to pack up what I could and just go," she said. "I probably would have tried to go back to California to find a room to rent."

While Knoche finally fended off foreclosure in November by getting her $1,242 monthly payments lowered by more than half, she was very close to joining hundreds of Kingman-area residents forced to give up their homes since the real-estate boom went bust.

As the Phoenix area's crush of foreclosures has drawn national attention, routinely ranking among the most-severely hit U.S. markets, Arizona's rural communities have quietly grappled with their own crisis.

And it's a crisis with little relief in sight for smaller towns. Many homeowners faced with escalating mortgage payments and job losses have been giving up on modifying mortgages and then abandoning homes.

With neither strong rental markets to absorb displaced homeowners nor ample job opportunities, leaders in some rural communities fear they are losing longtime residents due to foreclosures.

Cronkite News Service visited communities in Coconino, Mohave and Santa Cruz counties to learn how residents, business leaders and community groups have been affected.

In those three counties combined, roughly 5,360 homes have faced foreclosure through October 2010, according to Irvine, Calif.-based RealtyTrac.

Gathering specific data on rural foreclosures and the effects on the established communities, which have more seasonal residents and mobile and manufactured housing, is difficult, said Jay Butler, associate professor of realty studies at Arizona State University's W.P. Carey School of Business.

"There's not a lot of data on the rural areas," Butler said. "It's a different mix of things that are ongoing there. The economies are much smaller."

A real-estate recovery won't begin until at least next year, he added.

Mohave County

Kingman, a community of 27,521 in northwestern Arizona, boasts tourism and manufacturing industries along a busy railroad and interstate. People here say they enjoy the more-relaxed pace of life over the metropolitan bustle of Las Vegas or Phoenix.

Kingman's foreclosure rates have been unprecedented in the past few years, with 124 foreclosures in the town in October alone, RealtyTrac said. In all of Mohave County, where more than 502 homes were in some stage of foreclosure in October, 3,745 homes faced foreclosure last year.

Kingman had the second-highest number of foreclosures in Mohave County in October after Lake Havasu City, which had 165. Bullhead City, with 110 foreclosures, ranked third. All three municipalities had foreclosure rates higher than both the state and national rates.

"For a community like Kingman here, it's had a pretty big impact," said Jim Wells, Mohave County's federal Department of Housing and Urban Development-approved housing counselor. "It's a lot of people losing their homes. In a small town, there's not a whole lot of resiliency - there's less people to give it that."

Coconino County

One out of every 445 homes in Coconino County, or 136 homes, was in some stage of foreclosure in October, according to RealtyTrac. That's more than seven times the foreclosure rate of October 2006, when Coconino County had 19 foreclosures.

A surge of foreclosures in Flagstaff that began with high-end homes is now plaguing homes in all price ranges - from a $150,000 house in Kachina Village to a $750,000 mansion in the University Heights neighborhood, said Cher Ferry, a housing counselor with the non-profit BothHands, which helps connect residents with affordable housing.

"It's almost like you have an abandoned area," Ferry said. "Ten families leaving one small rural area in Flagstaff is huge. And they have nowhere to go. So a lot of them just pack up and move out of Flagstaff."

Santa Cruz County

The onslaught of foreclosures is only part of a complex economic struggle in Nogales and nearby Rio Rico.

Businesses that rely on traffic from Mexico have been struggling with effects of SB 1070, Arizona's immigration law that has made many Mexicans fearful of crossing the border, said Arnold Quijada, chairman of the Nogales-Santa Cruz County Chamber of Commerce.

Further, recent media reports have highlighted the growing violence on the Mexican side of Nogales and other border towns, keeping visitors at bay, Quijada said. In response, the chamber is launching campaigns to reverse the effects of the immigration law, negative media portrayals and the foreclosure crisis.

"Nogales and Santa Cruz County are in a very unique situation due to the fact that we're so close to the border," Quijada said. "Definitely, we want to continue prospering. A town with many difficulties, it's hard to continue progressing."

Like Kingman and Flagstaff, Nogales has been hit with the economic impact of foreclosures. Santa Cruz County, with 17,578 homes in 2009, according to U.S. Census Bureau, had roughly 67 foreclosures in October, including 14 in Nogales.

Rio Rico, less than 10 miles north of Nogales, has been hit most severely by foreclosures, with 40 properties - or one out of every 110 homes - in the foreclosure process in October, according to RealtyTrac. That's 10 times higher than the foreclosure rate in October 2006.

"I've been hearing it's going to get a lot worse," said Santa Cruz County auctioneer Jamie Sainz, who now announces about 300 trustee sales per month. "There's no jobs down here. No jobs to keep."


October foreclosures

• Apache County - 14.

• Cochise County - 104.

• Coconino County - 136.

• Gila County - 61.

• Graham County - 23.

• Greenlee County - 3.

• La Paz County - 13.

• Maricopa County - 11,683.

• Mohave County - 502.

• Navajo County - 124.

• Pima County - 1,614.

• Pinal County - 1,544.

• Santa Cruz County - 67.

• Yavapai County - 453.

• Yuma County - 197.

Source: RealtyTrac

by Rebecca L. McClay Cronkite News Service Jan. 17, 2011 12:00 AM

Ariz. housing bust tests smaller towns

Real Estate News

HootSuite - Social Media Dashboard