While an abundance of “For Sale” signs litter lawns throughout the Valley, Tempe has seen fewer foreclosed homes than other local cities.
A Realty Studies report released by the W. P. Carey School of Business indicated that foreclosures in Tempe accounted for 36 percent of total single-family resale homes in February, while the average is 62 percent for Valley cities.
Ray Johnson, a real estate agent in Tempe, said one reason the city is doing comparatively better is the lack of construction and resale activity.
“There’s less turnover in Tempe because it’s harder to buy in Tempe than it is elsewhere,” Johnson said.
Jay Butler, an associate professor of real estate, said foreclosure-related activity represented 65 percent of the Phoenix market’s recorded activity in February.
Butler compiles the monthly report, which contains statistics, charts and data on the resale market of Valley cities, and releases it on W. P. Carey’s Division of Real Estate Web site.
Of Tempe’s 125 resale homes in February, 45 were foreclosures.
“[In Tempe], there was not a lot of new construction during the housing boom,” Johnson said. “You saw fewer transactions in Tempe during the height of the market.”
Johnson said some ASU students might worry that their properties could be foreclosed on without warning — despite paying their rent — and they could be evicted. However, there are new options available to tenants of foreclosed homes, he said.
“If the lease is valid, under some of [President Barack] Obama’s new laws that passed a few months ago, tenants can stay in the property through the end of the lease,” Johnson said. The tenants could continue to pay rent to the home’s new owner — the bank — until the lease expires, he said.
Another option renters can take is called “cash for keys,” where the bank offers cash settlements to the tenants to help facilitate moving fees and other inconveniences if they vacate the homes.
While the number of foreclosures in Tempe is small, many cities in the Phoenix metropolitan area continue to struggle in the economic downturn.
In February, foreclosed homes accounted for 48 percent of the housing market in Phoenix, 42 percent in Chandler and 41 percent in Mesa.
“The fundamental problem remains,” Butler said, “that a weak recovery is restricting job growth that could impact the ability of property owners to maintain their homes.”
Reach the reporter at joseph.schmidt@asu.edu.
