With a little bit of analysis, the allegation that there is an overwhelming shadow inventory on the Phoenix real estate market is easily banished. Unfortunately, homeowners and homebuyers are frequently led awry by incorrect reporting, even in large news outlets. There are resources that should be verified to get an accurate appraisal of how much stock could be available and that is currently in the hands of lenders.
Erroneous Reporting
Reuters, one of the major news agencies in the world, stated in July of 2012 that price gains in Phoenix - and other so-called foreclosure-heavy regions such as Miami - are largely because banks are in possession of a lot of inventory that they are not putting on the market. The excuse given for this is a potential scandal due to robo-signing on the part of banks. Unfortunately, the data put out in the media is unreliable.
In the Phoenix market, at least, if the banks were to let the inventory that they currently hold onto the market, it would make a trivial or no difference at all in the prices for homes, especially considering the increase in demand the last year.
Not That Many
The Cromford Report tracks the chunk of inventory that is owned by lenders. This tracking is only attainable by subscription, but it keeps record of Phoenix housing inventory to a very precise degree. According to these reports, there aren't even 5,900 residential homes in the hands of lenders. Almost half of those properties are already active, many of them are pending sales and some of them are off of the market on ARMLS, according to Arizona Real Estate Trends.
Of the remaining number of homes not included in that number, many of them are under leases and are occupied by tenants. The reporting mentions that, if all of that inventory was released, it would account for less than two weeks of inventory in the Phoenix market. This would not have a significant impact on the prices of real estate in the overall market. In fact, in a healthy real estate market, the inventory is usually in the neighborhood of six month's worth of homes.
Not Many Foreclosures
Another popular conception is that Arizona is one of the worst states as far as foreclosure rates go. In fact, Arizona has a foreclosure rate that is below the national average. Currently, according to the reporting, Arizona has almost 5.9 percent of its homes which are 30 days delinquent and not yet in foreclosure. The United States average for that same figure is 7.6 percent. As for homes that are over 30 days delinquent and are in foreclosure, Arizona has a rate of 8.7 percent, while the United States as a whole has an average of 11.3 percent.
Though the two states are often compared side-by-side in real estate reporting, Florida has a 21.3 percent rate of loans that are 30 days or more past due and that are in foreclosure, making evident that Arizona is in better shape than is popularly portrayed in the media. Shadow inventory on the Arizona real estate market, quite simply, is a myth.
Erroneous Reporting
Reuters, one of the major news agencies in the world, stated in July of 2012 that price gains in Phoenix - and other so-called foreclosure-heavy regions such as Miami - are largely because banks are in possession of a lot of inventory that they are not putting on the market. The excuse given for this is a potential scandal due to robo-signing on the part of banks. Unfortunately, the data put out in the media is unreliable.
In the Phoenix market, at least, if the banks were to let the inventory that they currently hold onto the market, it would make a trivial or no difference at all in the prices for homes, especially considering the increase in demand the last year.
Not That Many
The Cromford Report tracks the chunk of inventory that is owned by lenders. This tracking is only attainable by subscription, but it keeps record of Phoenix housing inventory to a very precise degree. According to these reports, there aren't even 5,900 residential homes in the hands of lenders. Almost half of those properties are already active, many of them are pending sales and some of them are off of the market on ARMLS, according to Arizona Real Estate Trends.
Of the remaining number of homes not included in that number, many of them are under leases and are occupied by tenants. The reporting mentions that, if all of that inventory was released, it would account for less than two weeks of inventory in the Phoenix market. This would not have a significant impact on the prices of real estate in the overall market. In fact, in a healthy real estate market, the inventory is usually in the neighborhood of six month's worth of homes.
Not Many Foreclosures
Another popular conception is that Arizona is one of the worst states as far as foreclosure rates go. In fact, Arizona has a foreclosure rate that is below the national average. Currently, according to the reporting, Arizona has almost 5.9 percent of its homes which are 30 days delinquent and not yet in foreclosure. The United States average for that same figure is 7.6 percent. As for homes that are over 30 days delinquent and are in foreclosure, Arizona has a rate of 8.7 percent, while the United States as a whole has an average of 11.3 percent.
Though the two states are often compared side-by-side in real estate reporting, Florida has a 21.3 percent rate of loans that are 30 days or more past due and that are in foreclosure, making evident that Arizona is in better shape than is popularly portrayed in the media. Shadow inventory on the Arizona real estate market, quite simply, is a myth.
About the Author:
If you want to learn more about Phoenix homes or have any questions about buying or selling homes in Phoenix or the surrounding areas, please feel free to SEARCH PHOENIX REAL ESTATE or contact PHOENIX ARIZONA REALTOR Jen Wehner.
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