Housing Crisis

Foreclosed properties have created a significant challenge by increasing the housing stock inventory beyond a normal absorption rate. With other contributing market factors, the Greater Phoenix Metropolitan area has been identified as a depressed market based upon three indicators of adverse conditions: mortgage delinquencies, declining home values and an increasing housing inventory.

These factors have also created tighter lending policies that have made it even more challenging to acquire an affordable mortgage. This creates a vicious cycle, especially for families with limited resources and who qualify as low-income.

Arizona has one of the highest foreclosure rates in the country with approximately one in every 225 households reporting a foreclosure filing in 2008. This is an increase of over 181% from the previous year. Some districts inside Phoenix have experienced over a 300% increase in foreclosures over fiscal 2007. Some industry reports have indicated that the decline in home prices is only one-third to one-half over, due primarily to the magnitude of the supply and demand imbalance in the housing market. Homebuyers may struggle with stricter borrowing guidelines throughout the foreseeable future.