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Phoenix Area Real Estate “Shadow Inventory” – Fact or Fiction?

August 20, 2012 by · Leave a Comment 

There are few absolute certainties when it comes to Phoenix real estate, and the debate about the so-called “shadow inventory” is no exception.  If you’re not aware of that term, it refers to real estate that the banks have already acquired via foreclosure and are holding onto for the perfect moment to dump them back on the market.

Many real estate aficionados believe that the shadow inventory is not only going to quell our current market recovery, but is actually going to lead to a double-dip housing bust.

The truth will only be borne out in time, as it is impossible to accurately determine numbers of properties being held across all the different lending institutions, as well as the status of negotiations with existing homeowners in default.

A number of details seem to indicate that the Phoenix area housing market won’t be subject to a shadow inventory effect.

  • Mike Orr, real estate analyst at ASU’s W.P. Carey School of Business, recently reported, “There is still no sign of any significant new supply of homes coming onto the market, and those who anticipate a flood of bank-owned ‘shadow inventory’ are likely to be very disappointed.
  • The Mortgage Bankers’ Association reported last week that Arizona’s mortgage delinquency rate fell from 6.5% to 6.2% since the start of 2012, placing Arizona 35th in the nation in delinquency rates.
  • Filing of Notices of Trustee Sales in Maricopa County fell again to 3,219 in July 2012.  It was 4,328 in May and 3,711 in June.
  • Bank owned sales as a percentage of total monthly sales has also fallen steadily, despite a very tight inventory supply.  Here’s a graphic from R.L. Brown Reports that illustrates the trend:

At the moment, most indicators point towards the fact that there will not be a shadow inventory dump in the Greater Phoenix housing market, but only time will tell.  If the banks are holding significant inventory, with a 25% rise in the median sales price in the last 12 months and continued tight inventory levels, now would be a good time to start selling it off.


What do you think?  Are we going to see a shadow inventory release in the upcoming months?

Phoenix Real Estate Update: 3/29/12

March 29, 2012 by · Leave a Comment 

The following stats are sourced from the Arizona Regional Multiple Listing Service (ARMLS) as of today, 3/29/12.

The data includes residential properties (houses, patio homes, town homes, and patio homes).  It excludes land, multi-family properties (2+ units), commercial properties, mobile homes, and timeshares.

The search area covers a 40-mile radius centered on Phoenix Sky Harbor Airport, creating a circle with an 80-mile diameter.


Total Active Inventory: 11,627 units

Single Family Homes: 9,496 units

Patio Homes: 276 units

Condos/Town Homes/Other: 1,853 units


Total AWC/Pending Inventory: 20,011

Single Family Homes: 17,472 units

Patio Homes: 249 units

Condos/Town Homes/Other: 2,293 units


Trailing 30-Day Sales Data

Total Sales: 7,482 units

Single Family Homes: 6,335

Patio Homes: 133

Condos/Town Homes/Other: 1,014

Average Sales Price: $184,455

Median Sales Price: $131,000


If you have any questions about these stats or about the Greater Phoenix real estate market in general, feel free to post them below.

New FANNIE MAE Refi Program Designed to Help Homeowners who are “Under Water”

May 9, 2008 by · Leave a Comment 

By the middle of 2008, Fannie Mae intends to introduce a program that would allow homeowners who currently owe more than their homes are worth to refinance their mortgage(s), giving them the opportunity to lock in a lower fixed rate.


The amount refinanced would be equivalent to the existing mortgage and only homeowners who are current on their current mortgage payments would qualify.  They could refinance loans of as much as 120% of their existing mortgage balance.


If rolled out, an estimated 150,000 households would qualify for this plan.  Fannie Mae hopes that, since homeowners need to be current to qualify, any who enroll in the program will remain current with their payments until the market fully corrects.


This seems to be a very good option for those Phoenix real estate and Scottsdale real estate owners who I really feel bad for – those who remain current with their existing mortgages but at a great cost, and who might not otherwise qualify for a short sale.

Arizona Foreclosure Filings Soar During the First Quarter of 2008

April 29, 2008 by · Leave a Comment 

According to RealtyTrac, a foreclosure tracking service, for the first 3 months of 2008 Arizona’s foreclosure rate was up 245% from the same period one year ago.  About 1 in every 95 homes in the state is a foreclosure, about double the national average.


We’re starting to see many of the exotic loans with 3-year ‘teaser terms’ issued during the height of the market in 2005 go into default, and we can expect to see this trend continue in the near term. 


We can expect to see ‘normal’ appreciation rates of 4-6% per year return to the Phoenix real estate and Scottsdale real estate markets once the excess inventory is absorbed.  In the meantime, there are some great opportunities out there!