Foreclosures became a larger part of the Valley’s housing market in July, marking the second straight month they increased after declining earlier this year.
Around 43 percent of the houses sold last month in the Phoenix area were foreclosures, the highest percentage since January, according to monthly reports compiled at ASU.
The amount of foreclosures in the housing market began to decline in April, but after several months in the 30-percent range, foreclosures began to rise again in June, the reports show.
Jay Butler, associate professor of real estate for the W. P. Carey School of Business, compiles the monthly reports on the resale home market for the Phoenix area. Butler's latest report detailing the increase of foreclosures was released Aug. 11.
Butler said the absolute number of foreclosures is down, but the share of foreclosures recorded on the market has increased.
"The economy really hasn't strengthened," Butler said. "The job market and income market hasn't strengthened. That's led to a lot of people not being able to hold on. You've got a growing number of frustrated people out there who … might be able to afford the home [but] don't want to, and they're letting the homes go.”
The recession struck a hard blow to the local housing market, which received substantial growth through the ‘90s and into the new millennium.
Nate Martinez, a real estate agent in Phoenix, said many factors contribute to the housing market, and that the recent increase in foreclosures may be the result of homeowners’ financial woes from past months.
"We're dealing in an economic time like never before," Martinez said. "I think that if there was no short sales or loan modifications, trial periods, these properties might've flushed out already."
Many first-time homebuyers are taking advantage of the current market conditions, purchasing properties that may not have been affordable during more prosperous years. Butler advised young people to be cautious when purchasing a home and to consider their personal situations carefully.
“If you’re a student or you’re just starting in your career, you might be better off putting your time into your career or into your studies than into maintaining a home,” Butler said. “A lot of people who were students during the hyper market, or starting their careers, bought homes and spent so much time trying to keep them up ... that they sort of fell behind in other aspects.”
Butler said students should know their reasons for buying a home and make sure they’re ready to uphold the duties that accompany being a homeowner.
Martinez, who has sold homes throughout the Valley, said the current market provides a great opportunity to become a homeowner.
“It’s a buyer’s market. It’s not like you’re [going to] go write a contract on a house, and there’s another house next door that’s not going to be available,” Martinez said. “You have a high inventory, you have the lowest interest rates in 40 years ... That won’t last forever. It’s the perfect time to buy a house.”
Reach the reporter at joseph.schmidt@asu.edu
