Historically speaking, foreclosures have played a role in Maricopa’s housing prices.
A foreclosure, in a nutshell, is when a homeowner falls behind on their payments and the lender initiates the legal process to recover the amount owed. Homeowners are given a 90-day notice to bring their payments current. At the end of the 90 days, there’s a Trustee’s Sale, or an auction, where the lender sets the minimum bid at the amount to satisfy the loan. If that minimum isn’t met, the bank takes ownership of the property and sells it.
During the Great Recession, a wave of foreclosures from 2008-11 sank the market like a stone.
The height of the trend came in 2009 when 1,651 homes were sold that were either lender-owned or HUD homes, meaning the homes were not purchased at the Trustee’s Sale, and lenders had taken ownership.
A lot has changed since those days. Most notably, for nearly two years, there wasn’t a single foreclosure in Maricopa, or anywhere else for that matter. At the beginning of 2020, the Federal government put a moratorium on foreclosures, which was lifted earlier this year in January.
Logic would hold that after nearly two years of a moratorium, there’s a backlog of foreclosures that need to be processed.
So, does that mean there’s a flood of cheap houses coming to the market soon?
Unlike the Great Recession, housing prices rose during the pandemic, so homeowners who get behind on their payments can usually just sell their homes, avoid foreclosure, and even make a profit.
And the homes that still make it to auction are being purchased by investors offering more than the minimum bid amount. Those homes are then flipped and sold at market value.
There are currently just 19 “pre-foreclosure” homes in Maricopa, where a Trustee’s Sale date has been set. But even if that starts to increase, the number of homes ending up as lender-owned properties will probably remain at or near zero.
All of this means that market is still hot, and the few potential foreclosures that pop up are quickly absorbed and have no effect on prices.
Dayv Morgan is a Maricopa Realtor and owner of HomeSmart Premier.
This sponsored content was first published in the July edition of InMaricopa magazine.