Southwest Valley Engulfed By Foreclosures
September 8th, 2008
The southwest valley has been engulfed by foreclosures. No city in this region has come out without being scarred. There were a total of 2,195 foreclosures in Avondale, Buckeye, Goodyear, Litchfield Park and Tolleson during the first two quarters of the current year, 2008. During the same time in 2007 there were only 413 foreclosure postings.
Jay Butler of Arizona University comments that it is wrong to think that only the low-income group has been hit by foreclosures. On the contrary all those who have stretched their incomes beyond limits are now having to pay the price with foreclosures.
Arizona Republic has analyzed that Tolleson together with Litchfiled Park were the top rankers with respective increases of 665% and 563%. There is a yawning demographic difference between the two regions. The average price of a house in Tolleson was $230,000 in 2007 and in Litchfield Park $360,740 respectively. The median household income in Tolleson in 2005 was $41,600 but in Litchfield it was much higher at $77,200 according to the findings of OnBoard a consulting firm studying trends in the real estate.
Butler pointed out that the data might have inflated the numbers by including those foreclosed house on unincorporated islands of the county that have city addresses. But despite these discrepancies there is no denying the fact that foreclosures have risen astronomically. The borrowers could no longer afford to maintain the luxuries they thought they could enjoy.
The biggest losers were those who made investments in real estate being sure of netting in quick profits because of rising house value. But in realty it turned out otherwise and they were gifted with foreclosures instead. Tolleson was especially vulnerable to outside investors. When the market fell the value of the houses tumbled to less than the loan amount.
Apart from Tolleson and Litchfield other cities too were hard hit by foreclosures – mostly the places were new constructions had come up from 2002 to 2005 with sub-prime mortgage loans. The borrowers had poor credit record and could not manage when the interest rates escalated. Avondale and Buckeye had higher foreclosure numbers than Maricopa County – all resulting from individual and investor borrowers bungling on their loans.
The banks in Goodyear now own more than 60% of the foreclosed houses. About 75% of these REO houses were sold in July. It was good news for the property market. But although sales are picking up the prices continue to tumble with more foreclosed houses crowding into the market.
- Civil Courts are Clogged by Staggering Number of Foreclosures
- Scam Companies Are Proliferating, Thanks to Foreclosure Crisis
- The Obama Government Aggressively Responding to the Foreclosure Crisis
- Foreclosure Measures Being Discussed by Congress and HUD Secretary
- Ben Bernanke Facing Brickbats As Well As Kudos for His Foreclosure Mitigation Plans
- House Builders and Mortgage Associations Wake Up To the Benefits of Empowering Judges to Modify Loans to Avoid Foreclosures
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