PHOENIX – New foreclosure filings in Arizona have fallen to the lowest level in seven years, a sign of a recovering housing market, according to RealtyTrac, a real estate information company.
New foreclosure filings in Arizona fell to 2,500 in September, the fewest since August 2006, according to RealtyTrac’s statistics.
“I would say that it’s on the leading edge of getting through the bulk of the foreclosure problem,” said Daren Blomquist, vice president of RealtyTrac.
Even though Phoenix and Tucson lead the housing market recovery, Arizona as a whole has seen a decrease in foreclosures, he said.
For the third quarter of 2013, Arizona’s average foreclosure process took 240 days to complete, Blomquist said.
Arizona’s foreclosure process was ninth-fastest among states during that period, he said, adding that Texas had the fastest foreclosure process at 164 days.
Michael Orr, director of the Real Estate Center at Arizona State University’s W.P. Carey School of Business, said appreciating home prices remove incentives for people to go into foreclosure, noting the people no longer feel their homes are worthless.
Although many homeowners still haven’t fully recouped equity in their homes, the market is better than it was a few years ago, he said.
“There’s still quite a lot of people who are underwater, but the number of people underwater now is about half of what is was two years ago when we were at the bottom of the market,” Orr said.
The Phoenix metropolitan area had about 1,600 new foreclosure listings in September, the lowest total since July 2006, according to RealtyTrac’s statistics.
The Tucson area had about 400 new foreclosure listings in September, down from nearly 1,400 from the same month the year prior, according to RealtyTrac’s statistics.
Cathy Erchull, president of the Tucson Association of Realtors, said that area is experiencing an increased inventory of homes on the market.
The average home in the Pima County is on the market for about four or five months, she said, adding any longer would be a buyers’ market and any shorter would be a sellers’ market.
“When you’re looking at those kind of things, we’re more in the normal market,” Erchull said.
Flagstaff had 45 new foreclosure listings in September, down from 103 in September 2012, according to RealtyTrac’s statistics.
Jacquie Kellogg, president-elect of the Northern Arizona Association of Realtors, said that area has many second homes, which weren’t as affected by the housing crisis, she said.
“When we had the crash, we never really went down as far as the other markets did,” Kellogg said.
The market is still a few years away from fully recovering from the housing crisis, she said.
Many many properties don’t make it to foreclosure because people short-sell their homes, something that may replace foreclosures, Kellogg said.
“I actually see short sales taking over foreclosures because it’s more efficient and so doesn’t cost the bank as much,” she said.
George Hammond, associate director at the Economic and Business Research Center at the University of Arizona’s Eller College of Business, said the overall performance of the economy is an important factor in home prices and foreclosures.
Arizona has experienced slow job and income growth since the economy bottomed out in 2010, he said, adding these factors also attract people from other parts of the country.
“It also tends to increase population growth, and that tends to drive demand for housing as new people move into the region, and that supports overall house price growth,” Hammond said.