Foreclosures And Trustee Sale Notices

January 8th, 2008

There is not much to celebrate during this happy season. The end of the year saw 10,000 houses struck down by foreclosures. The lenders repossessed almost all, except for 10%, of these houses. The houses are a headache for the banks also. They will be sitting around unless buyers pick them up for prices less than the price it was bought for in the recent past.

December turned out to be the cruelest month. In the Valley 1,617 houses were foreclosed. Last year in the same month there had been 213 foreclosures. All this is a fall out from the sub-prime crisis with rates doubling or trebling to unmanageable proportions.

What really rose were the notice-of-trustee sales. It shot up to 30,124 in 2007. These are precursors to foreclosures – the rumblings of the storm ahead. In December it rose to a record high of 3,852. There are no signs of the weather clearing.

An expert in the information market, Tom Ruff, opines that by the end of the first quarter of this year many of these notice-of-trustee sales will become foreclosures. The first three months alone might witness 5,000 foreclosure listings.

In 2005 there had been less than 2000 foreclosures. At that time the real estate market was in good health and it was not difficult to sell the house and pay off old loans or even refinance. The point is that the house owners facing trouble at that time did not have sub-prime loans with interests about to spike.

The only consolation is when one region points to another and feels comparatively better off. Otherwise the scenario offers little comfort. Nevada has more foreclosures than Arizona. Clark County of Las Vegas fame had more than 26,000 foreclosure listings in 2007. In size Maricopa County is almost double that of Clark County but it has only 3,000 more pre-foreclosures.

Searching for a silver lining it may be observed that according to Phoenix housing analyst R.L. Brown, more houses were sold than built – a good pointer to a recovering market. Some builders are more at a disadvantage than others. The situation is so grim that these groups may not be able to tide over the crisis and have to go into liquidation. But a pick up in the sale might tilt the balance in favour of the general market – that might be good all round news.