When Will Demand Rise for Phoenix Foreclosure Homes?

by : philip smith

Probably not a bad time at all to buy Phoenix Foreclosure homes! In many Valley communities house prices are down, there is an oversupply of affordable homes coming onto the market due to foreclosure, yet job prospects lure many driving a keen demand for rental property.

A dramatic population shift over the last century means that many of the largest cities in the nation are emerging in states bordering Mexico. Phoenix is now the fifth largest city with a population of 1.5 million in 2006. It is a fast growing city today, growing by another 43,000 people between 2005 and 2006. Being a desert state, it is not surprising that the population is densest around the largest cities, and the metropolitan area around Phoenix accounts for more than 3 quarters of the Arizona residential market. Phoenix is county seat of Maricopa County, which recorded 70% of the significant increasing foreclosure filings in Arizona in August.

There are distinct areas across the Valley that have suffered the most foreclosures, and the common factor is that each area is known for its affordable homes. In Maryvale, West Phoenix, and Mesa, East Valley, home owners with adjustable rates mortgages have been especially vulnerable. Some local experts believe that other clusters of foreclosures will be noticeable over the next 6 months pushing prices down in those areas as well.

Is it a good time to buy? Often buyers are reluctant to venture into a cold market, awaiting the signs that prices are rebounding before making their move. Here in Phoenix, unemployment remains low and Phoenix ranks highly in percentage growth terms of jobs in the private sector, so demand for affordable rental housing is strong. Those losing their homes to foreclosure are unlikely to want to move from the city or its suburbs. Any buyer waiting out the winter will do well to remember that there is a lost opportunity cost to be paid for feeling more comfortable and delaying a purchase of a very affordable foreclosure for rental income. The negotiating power of the buyer is probably at its peak in Phoenix this fall.