Saturday, May 14, 2011

Phoenix-area foreclosures down slightly in April

In April, for the second month in a row, the foreclosure rate among Phoenix-area homes decreased slightly from the previous month, according to an Arizona State University study issued Tuesday.

Although the drop could signal the beginning of a positive trend, ASU realty studies director Jay Butler said foreclosures remained far too dominant in the market for anyone involved to start cheering.

In January and February, 43 percent of home-resale transactions in the Phoenix-area market were foreclosures, the report said.

The incidence of foreclosure declined to nearly 38 percent of transactions in March and again to about 36 percent in April.

Butler said those numbers were moving in the right direction, but he cautioned against making too much of the back-to-back decreases.

He and other analysts are concerned that foreclosures could spike again in the coming months unless the local economy and job market start to experience a more pronounced recovery.

"The actual number of monthly foreclosures in the Phoenix area is still very high," he said. "It's like flying through a hurricane, and we may just be in the eye right now. There's probably more of the storm to go through, and we could see another wave of foreclosures."

In April, the Phoenix area had 3,745 foreclosures. That's down from 4,145 in March but more than the 3,490 foreclosures in April 2010.

Butler said it was unlikely that analysts would get a clear sense of which way the housing market was headed before October or November.

"Some homeowners have a lot of frustration built up, having used many of their resources like 401(k)s and other savings accounts to keep their homes; it's unclear how much longer they can hold on," Butler said.

To make matters more uncertain, he said, the mortgage-lending industry is currently debating the merits of stricter borrower-eligibility guidelines, analysts are warning about the potential for rising interest rates, and the Federal Housing Administration is in discussion about lowering the allowable limit for FHA-guaranteed loans.

"It will take time for all of this to play out," Butler said.

The median price for home resales in the Phoenix area in April was $125,000, the same as in March but down considerably from the April 2010 median of $144,000.

Butler said the median-sale price was likely to increase in the coming months as the Phoenix area moves into its traditional buying season, which usually winds down around August.

by J. Craig Anderson The Arizona Republic May. 11, 2011 12:00 AM

Phoenix-area foreclosures down slightly in April

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