The third quarter proved dismal in terms of foreclosure filings across Arizona despite some improvement in August and September, according to the latest market report from RealtyTrac, an online marketplace for foreclosure properties.
Arizona posted the nation's second-highest foreclosure rate in the third quarter, with one in every 53 housing units receiving a foreclosure filing, behind only Nevada with one in every 23 housing units receiving a foreclosure filing.
Foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 50,342 properties statewide, a 5 percent increase from the second quarter and a 24.5 percent increase from third-quarter 2008.
"There was a dip in September, which was a little bit of good news, but we've seen those monthly dips before, and they don't always translate into a long-term trend," said Daren Blomquist, RealtyTrac spokesman. "But because July was the highest monthly total we'd ever seen in Arizona in any one month, that helped to push the quarterly total up, and then August was pretty high as well."
Arizona, California, Florida, Nevada, Illinois and Michigan accounted for 62 percent of the nation's total foreclosure activity in the third quarter.
In September, one in every 179 housing units in Arizona received a foreclosure filing. That's down from one in every 150 housing units in August.
Last month, foreclosure filings were reported on 14,927 properties, a 16 percent decrease from August, when 17,807 were reported.
"Even though the quarter is up, you have seen two straight months of decreasing foreclosure activity, which is an early positive sign that maybe there's some stabilization in the market," Blomquist said. "We believe that there's a lot of that pent-up activity that hasn't even hit foreclosure yet that's out there, and there's always this kind of looming shadow of that hanging over the market right now in our minds. Because of that, we believe foreclosure activity is going to remain high nationwide and in Arizona as well, at least through the next couple of quarters."
Nationally, one in every 136 housing units received a foreclosure filing during the third quarter, the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 937,840 properties, a 5 percent increase from the previous quarter and a 22.5 percent increase from third-quarter 2008.
There is evidence that loan modifications are increasing, and therefore could prevent many foreclosures, Blomquist said.
"The jury is still out on those loan modifications whether they're going to stick for the long-term," he said. "The U.S. Treasury Department said ... they've done at least 500,000 trial modifications. So that's a big number, and we're seeing lower foreclosure counts because of that, but the big question is ... whether those people will unfortunately fall back into default again."