Is it possible that banks are finally running out of homeowners to foreclose on in the greater-Phoenix market? The numbers suggest this may be the case.
Take a look at this graph from Michael Orr’s Cromford Report. Note the three bottoms in April 2010 ($89.37), September 2010 ($82.37) and again in August 2011 ($79.14). Since last fall we’ve seen a steady increase here of almost 12%.
This next chart shows that new notices of trustee’s sales, while up slightly the past two months, are down significantly from this time last year.
Now take a look at this last graph. It shows how many homes were foreclosed on since the crash began in the 2nd quarter of 2007 through last month.
Almost 200,000 properties have gone through the foreclosure process since Q2 2007. According to the Arizona Regional Multiple Listing Service, approximately 232,000 homes sold during the bubble-era (2005-2007). Thus, it’s logical to conclude that nearly all of those unfortunate souls that bought a house during the boom have already been foreclosed on.
Of course, there’s no way to know how many homeowners that bought pre-boom and refinanced during the bubble are included in the total foreclosure numbers. And CoreLogic estimates at least 40% of Arizona homeowners are still underwater. Who knows if these borrowers will elect to pay or walk away?
It’s difficult to know how many more foreclosures are on the horizon. However, the data suggests the worst is behind us.
I don’t believe another “wave” in Phoenix is eminent, unless of course California drops into the ocean. And if that happens we’ll all be underwater. Literally.