Concerns about Foreclosures in Scottsdale and the Entire Phoenix Metropolitan Area

Despite some studies suggesting that the Phoenix metropolitan area, particularly Scottsdale, is on the brink of a foreclosure crisis, the reality may be quite different. This is true even considering that interest rates continue to rise slightly and home prices have remained stagnant so far this year. National headlines and news about these foreclosures often exaggerate the situation, making them seem more like fiction than reality, as official figures show that the number of homeowners at risk of foreclosure is actually decreasing. This may greatly disappoint those looking to make a quick purchase through an auction.

“Tina Tamboer, senior housing analyst at the Cromford Report, explained that most homeowners in Scottsdale and the greater Phoenix metropolitan area still have significant equity in their homes and continue to benefit from low mortgage rates. This provides them with a very good option, as when facing financial difficulties, they could still sell their properties and thus avoid foreclosure.

Additionally, let’s remember that the Department of Veterans Affairs had announced a pause on VA loan foreclosures until mid-year, which also contributed to the figures remaining lower than usual, with very similar numbers in the last three months of this year.

Typically, lenders wait until borrowers are three months behind on payments before filing a foreclosure notice, known as pre-foreclosure, which includes notices and all pertinent procedures before initiating the foreclosure of the property. For example, during the housing crisis of 2009, pre-foreclosure filings peaked at 10,100.

To understand what a true foreclosure crisis looks like, experienced real estate market analyst Tom Ruff from The Information Market suggests analyzing everything that happened between 2009 and 2010. At that time, lenders managed to auction off hundreds of foreclosed homes daily at the Maricopa County courthouse, and in terms of figures, properties mortgaged for at least $300,000 were sold for as little as $50,000 or less.

Speaking of national figures, many reports indicate a rapid increase in foreclosure actions. One such report is from the real estate data company Attom, which stated that in the last quarter, there has been an increase in foreclosures in the United States, approaching levels seen during the Covid-19 era.

This same Attom report shows that lending banks initiated foreclosures on 68,961 U.S. properties in the third quarter of this year, a 1% decrease from the second quarter and a 3% increase from the previous year. In September, there were 30 residential foreclosures across the Phoenix metropolitan area, six more than in September of the previous year.

With all these figures, we can say with certainty that regarding Scottsdale and the Phoenix metropolitan area, the real estate market is not yet in crisis, as there was only an increase of 6 foreclosures year over year, but it is more dramatic to say that these rose by 24%.

Foreclosures available:

Scottsdale: 30 homes available.

By Elias DaSilva | September 26, 2024