Foreclosures dropped in Valley in 2011, but still higher than normal - East Valley Tribune: Apache Junction

Foreclosures dropped in Valley in 2011, but still higher than normal

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Posted: Thursday, January 19, 2012 3:52 pm | Updated: 8:38 pm, Tue Jan 24, 2012.

Foreclosures and home prices in the Valley failed to show much improvement in 2011 despite some positive momentum during the year, according to the W. P. Carey School of Business at Arizona State University.

One of the better developments in the year-end findings was that foreclosures dropped to 35,855, down from 41,625 in 2010. That translated to foreclosures representing 34 percent of transactions, down from 39 percent in 2010. However, foreclosures account for less than 5 percent of transactions in a typical year.

Median prices fell in 2011, from $138,000 in 2010 to $125,000 for a single-family home. Condo median prices dropped from $88,000 to $79,000, according to Jay Butler, an emeritus professor who authored the report.

"Although 2011 ended on a slightly more positive note than 2010, there are several issues, including a weak economic recovery and stricter mortgage underwriting guidelines playing a role here," Butler said in a statement. "The main question for 2012 is whether homeowner/occupants will play an expanding role. We're starting to see investors getting very involved again, and many have shifted from buying foreclosed homes to actually attending foreclosure auctions. The number of non-institutional investors with successful bids has moved from about 20 percent all the way up to just over 40 percent."

About 3 percent of single-family homes in Maricopa County underwent foreclosures in 2011. More than 14 percent of all single-family homes in the county have been foreclosed on since 2008.

The sale price of homes, excluding foreclosures, has dropped by more than half since 2007, the report found. Median prices stood at $125,000, down from $260,000 four years earlier.

Butler said it will take years to fully reverse the drop from the peak. He cautioned that it won't be a straight upward trend, but a back-and-forth dance over the next several years that he called a "stretched recovery."

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