At the first of the year I had what I considered to be a brilliant idea: write a post about bank owned homes in a specific neighborhood – in this case Aviano, in Phoenix’s Desert Ridge area – and include a dynamic map of the homes for sale. This post would appear by magic on the search engines and I wouldn’t have to do anything to keep the information updated.
Ah, if not for the change in the bank owned market. You see, those folks who have been visiting this post haven’t been seeing a map of Aviano. Instead, they’ve been seeing a map that will help you find Oceanic Flight 815.
Why? Because there aren’t any bank owned homes for sale in Aviano and haven’t been all that many for quite some time. Presumably some will show up given the volume of short sales in the development, but the subdivision is one of many areas in the Phoenix real estate market where the decrease in bank owned inventory has been most apparent.
As of the moment there are less than 3,000 single family detached bank owned homes for sale in all of Maricopa County, an area larger than several states. That same figure had been over 10,000 less than a year ago.
So what happened? A popular theory is the moratoriums put in place by lenders last fall to tap into stimulus dollars. Which is well and good, except the notices continued to go out on any property that wasn’t owner occupied – in somewhat lesser numbers for a couple of months, but the foreclosures kept on happening.
Another theory is the lenders are hoarding these bank owned homes and not putting them on the market in a timely fashion. This I’m inclined to believe – there are two such homes in my neighborhood where the real estate agents already have turned in their broker price opinions but the homes haven’t appeared in the MLS – but there doesn’t seem to be any widespread conspiracy. Other homes I’ve seen have appeared on the MLS within six weeks of the foreclosure date, a fairly quick turnaround.
Inventory was supposed to rise because of the end of the moratoriums but it has been declining steadily since the first of the year. Recently, the legislature passed a poorly-worded bill that would give lenders the ability to pursue judgments against homeowners who foreclose to recoup the lenders’ losses. It’s been repealed – mercifully – but some have speculated banks were waiting on the sidelines until they saw the results, just in case they could go get a few extra dollars.
Personally, I tend to go back to what we said at Schwab when the stock market was more than a little choppy back in the fall of 2000 (and into the spring of 2001, mockingly) as the tech bubble burst – once we get the presidential election straightened out, the market should stabilize.
Which was another way of saying that we didn’t have the slightest idea what was going to happen. And that’s really where we are in the Phoenix real estate market. Almost all of us expected the so-called second wave of foreclosures; some are still looking for reasons why it has been delayed while others – me included – are starting to think the wave dissipated along the way (maybe somewhere in the vast South Pacific pictured above.)
It was assumed bank owned homes would dominate the market for the foreseeable future but they’re currently giving way to short sales – an unfortunate development if ever there was one. Most of the “active” listings you see aren’t and all of them represent gambles. Will the bank accept a short sale? Will they accept your price? Will they give you any kind of answer before the 2010 mid-term elections?
Who the hell knows …
Maybe the antidote to the ocean map is switching to a map of short sales in these same neighborhoods. Though, given the loose enforcement and massive loopholes in the Arizona Regional MLS rules on short sales, the data’s not all that good.
There’s nothing worse than looking at homes you believe to be active only to learn all you can do is submit a backup offer. Unless, of course, you’re hoping to see a map of Aviano and instead you’re looking at Tahiti.
[tags]Phoenix real estate[/tags]