Housing Bubble

Last October, I reported that Moody’s was predicting that the Phoenix housing market would see price declines of 9.3% between the first quarter of 2006 and the second quarter of 2008, which I called “wildly optimistic." Now Moody’s has issued a new report which claims the Phoenix housing market will see price declines of 17.8% between the second quarter of 2006 and the second quarter of 2008–they’ve doubled the percentage of drop for a time period that’s three months shorter. I’m guessing this will be closer to accurate–but still shy of the mark, unfortunately. The report also predicts a drop of 11.7% for Tucson, lower than October’s prediction of a 13.4% drop.

The Arizona Republic has an online database of 2007 foreclosures and notices of trustee’s sales, searchable by community (mostly cities), region, or zip code. I’m sorry to see that my neighborhood (mostly built up in the last 3-4 years) has pretty high rates of 25.9 foreclosures per 10,000 households and 115.94 notices per 10,000 households. At least I’m not in Surprise’s 85388 zip code, which has seen 310.9 foreclosures per 10,000 households and 997.8 notices per 10,000 households. Ouch! That’s over 3% of the zip code foreclosed upon already, and another 10% in danger, and we haven’t even seen the peak of ARM resets yet.

<img style=“display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;” src="/images/07AugNTR.jpg" border=“0” alt=“Click for full size"id=“BLOGGER_PHOTO_ID_5107270921523980290” /> August’s total was 3249, beating last month’s record high by an additional 746! Historical Comments houseofpain (2007-09-07): It defies gravity, holy moley!!!

Michael Donnelly’s blog has a chart of mortgage lender failures since April 2006, which reports that we reached 21 lenders going under this month yesterday, on the 21st of the month. (Via Distributed Republic.)

Despite new home builders offering unprecedented incentives, new home sales in Arizona are dismal. 2007 year-to-date sales (through July) were 33,510, compared to 41,835 for the same time period in 2006 and 68,235 for the same period in 2005. And this is while inventories and foreclosures are climbing. Historical Comments shrimplate (2007-08-10): One out of every three dollars generated by the Valley's economy comes from the housing industry. When that sinks, be in a lifeboat. It's gonna suck. ...

Arizona is the #7 state for per-capita preforeclosures: TOP 10 PREFORECLOSURE STATES State Filings Per CapitaNevada 19,044 2.55 percentFlorida 111,250 1.76 percentColorado 24,045 1.49 percentIllinois 52,984 1.35 percentNew Jersey 37,250 1.22 percentCalifornia 132,101 1.15 percentArizona 20,669 1.09 percentUtah 5,773 0.90 percentTexas 46,595 0.81 percentGeorgia 19,382 0.75 percent SOURCE: Foreclosures.com I’m not sure what the timeframe is for this data, but it looks like the last twelve months.

July, 2007, saw 2503 Notices of Trustee’s Sales in Maricopa County - yet another record. <img style=“display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;” src="/images/July07NTRs.jpg" border=“0” alt=““id=“BLOGGER_PHOTO_ID_5093562250792169458” /> Historical Comments houseofpain (2007-08-01): Holy moly, apocalypse!!! Anonymous (2007-08-01): I agree with house of pain. The pain is coming to the real estate market. I need more popcorn for this double feature. ...

<img style=“display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;” src="/images/Jun07NTR.jpg" border=“0” alt=“Maricopa County’s Notices of Trustee’s Sales, 1993 - 2007"id=“BLOGGER_PHOTO_ID_5083422755374284578” /> June’s Notices of Trustee’s Sales for the Phoenix metro area topped out at 2330, continuing the trend line set a year or so ago. At this point I can’t help thinking we’ve got nowhere to go but up. Even the scammers are saying that Phoenix is a bad market.

CNN’s Money website has a list of the top 500 zip codes for foreclosures. Here are the eleven Arizona entries on the list:PositionZip CodeCity StateDefault NoticesAuction NoticesBank RepossessionsTotal Foreclosure Filings140.85242Queen Creek AZ123040271183.85323Avondale AZ517865248270.85379Surprise AZ214563210324.85243Queen Creek AZ017225197355.85706Tucson AZ016918187395.85086Phoenix AZ012554179415.85239Maricopa AZ015520175423.85037Phoenix AZ113933173445.85338Goodyear AZ212441167452.85326Buckeye AZ112243166456.85335El Mirage AZ212439165

I just came across a wiki devoted to Casey Serin, the failed housing flipper turned blogger whose “I am Facing Foreclosure” blog documented the details of how he used liar loans to drive himself into $2 million in debt. It’s got quite an extensive collection of details about Serin, his deals, his blog, and the people he’s burned along the way, as well as appropriately critical articles about various real estate investment “gurus” like Robert Kiyosaki and descriptions of new natural phenomena and genetic mutants. Some very funny stuff. ...