Foreclosures
The Good: New foreclosure filings dropped a total of 11.68% since the first quarter and more importantly, new Notice of Trustee Sale filings in Maricopa, Pinal, and Pima counties are down 21.95% since last year.
The Bad: Trustee Sales stayed at extremely high levels throughout the first half of the year. Quarter to quarter actualization rates remain above 60% in the three county area and is likely to stay at these levels as failed modification and delayed sales finally occur. The pressure from the added inventory from this increase in actualized foreclosures may end up putting downward pressure on price as demand wanes after government incentives expire.
Outlook: 90% of foreclosure activity in the last 3 years can directly be attributed to loans originated in the “bubble years,” of ’05, ’06, ’07. As time moves forward the pool of loans to foreclose is simply getting smaller. Government efforts to keep homeowners in their properties and banks’ readjusting their strategy to accommodate an uncertain market climate may also be contributing to the decline in initial notices. These factors should continue to put downward pressure on foreclosure activity through the end of the year. However, finalized trustee sales levels are likely to stay high as the estimated 40,000 homes in some stage of foreclosure make their way out.
