The Information Market released their greater Maricopa County foreclosure statistics for May 2011. Although April’s numbers were probably more newsworthy with a greater number of foreclosures completed than new notices issued, May’s numbers provide newsworthy occurrences also. It’s time to review the current Phoenix foreclosure market and identify some significant changes that have occurred since the first of the year.

Foreclosure numbers as of 5/31/2011

• Total active residential notices are 27,396; the lowest number since 11/08. The number has dropped 28% since the first of the year, which is more than 10,000 fewer residential properties in foreclosure.
• The number of new notices in May was basically the same as the number of completed foreclosures. This is only the 2nd time that new monthly notices were not greater than monthly completions in the past 10 years;
• There were 4,000+ residential foreclosures cancelled last month; second highest all time.
• With only 1,900 short sales closed (Maricopa County) for May, there are other reasons that trustee sales are being canceled.
• New notices for May were basically the same as April and April had the fewest since 11/07.
• The number of residential properties currently owned by banks in Maricopa County is 18,451; the lowest since July of last year.

Bank Owned Inventory = 18,451

• 3,901 active listings in ARMLS;
• 325 listings in AWC status;
• 4,986 properties in pending status.

This accounts for 9,212 of the 18,451, or 50% of all bank owned properties. Where’s the other 50%? Good question. I imagine there are a number of issues such as previous owner evictions, tenants with valid leases, title issues, maintenance/property condition issues, or a few others that fall into the “miscellaneous legal issues” category. With basically a 1 month supply of active REO listings in the county (3,901 active / 3,765 sold in May), bringing on the other 50% of bank owned inventory will not “flood the market.” In fact, adding 9,000 active listings would add an additional 1 month supply to our current 2.4 month supply for the entire market.

As various sources reported last month, these developments are significant steps necessary for our market to improve. Sure these might be small steps and we’re not out of the woods yet, but I thought you might be interested in a year-to-date review as we head into our summer selling season.

Wow-I bet the press will have a field day reporting on November’s Maricopa County Foreclosure numbers.  Don’t get too excited if the ‘Foreclosures Plummet’ headlines come.  I think the Headlines should say something like ‘Foreclosure Moratoriums Impact the Market’.

Here are the numbers-

Notices for the November 5891-down 17% (1187) fewest new Notices since 3/08;

Foreclosures Completed:  2694-down 37% (1562) lowest since 3/08;

Canceled Notices:  3339-down 4%;

Total Active Notices:  41,771-which is up 192 from 10/10

Number of Bank Owned Properties:  19,966-down 4% or 855 for the month.

What’s this mean for December?  Most moratoriums have been lifted, and foreclosures are being completed again, although Fannie Mae and Freddie Mac have announced they will halt foreclosure evictions between Dec. 20 and Jan. 3.   And Bank of America has said it will pause its foreclosure sales and evictions from “late December through New Years Day,” on loans held in its portfolio or loans held by investors who will allow such a moratorium.

So the foreclosure market won’t return to a full calendar month until January.  These actions in November and December should make for a ‘surge’ in foreclosure numbers for the 1^st Quarter of 2011.

Wow a last minute reprieve regarding the tax credit! What’s that mean? We’ll have fewer cancelations of the 17,000 properties currently in escrow. With all the discussion regarding an extension for the last couple of weeks, it appears that not all the lenders, sellers and buyers believed that it was necessary to close by 6/30. Oh well June still has, at this time 9083 closed, that’s basically the same as May, but down about 3% from June 2009. REO and Short Sale (SS) trends continue, namely REO’s are dropping (36%) in number and SS are increasing (25%). Pendings are dropping also – they’re now at 10,502, with 7200+ in AWC.

Regarding the foreclosure numbers, some noteworthy items: New Notices: 6170 the lowest # since 4/08; Number of completed foreclosures 4894-which is up 800 from May; Cancellations 4540-the 2nd highest on record and + 900 from last month; The change in the Pending Foreclosure #’s was the largest drop on record @2673-down to 42,324 the lowest since 3/9. The Bank Owned number rose by 500 to 16,861. You can see the Maricopa County Foreclosure Statistics graphed here.