Out-of-state investors buy foreclosures in Arizona while enjoying the Grand Canyon, the warm weather and other tourist attractions in the state.
According to real estate professionals, such as Scottsdale lawyer Jordan Rose, investors from other states come to Arizona to enjoy sights and laze in resorts while looking for bargain-priced foreclosures as second homes and investments. There are even some deciding to move to Arizona and make their purchases as their primary residences.
According to a report from a California-based foreclosure research firm, Arizona had 163,210 or 6.1 percent of its housing units put into the foreclosure process in 2009, an increase of nearly 40 percent from its 2008 foreclosure activity and an overwhelming 323-percent jump from its foreclosure pace in 2007. Arizona was second only to Nevada in intensity of foreclosure activity last year.
In December, foreclosures in Arizona shot up by 40 percent from November. For the entire year of 2009, Arizona and three other states – California, Florida and Illinois – accounted for more than half of the total foreclosure filings in the country, which reached 2.8 million.
It is expected then that people with cash and other sources of funding come to Arizona to buy foreclosures. They would have a lot of properties to choose from, including HUD home foreclosures. The number of HUD homes has been rising as the percentage of government-backed home loans continue to increase.
In addition to the large number of available foreclosures for sale, investors are also attracted to Arizona because of the sharp decreases in home prices. According to First American CoreLogic, the state continues to post some of the sharpest house price declines in the country. In October last year, home prices fell by more than 17 percent over a 12-month period.
Excluding short sales, bank-owned homes and government tax foreclosures from the calculations, house prices dropped by 14 percent in October.
Meanwhile, the state of Arizona was one of only six states that received six-digit funding from the U.S. Department of Housing and Urban Development under its Neighborhood Stabilization Program. Arizona got $117.95 million. Florida and California topped the allocation list with $348.31 million and $318.05 million, respectively.
Of the money given to Arizona, Chicanos Por La Causa Inc., an Arizona-based consortium that also operates in other states, got $35.78 million while the city of Phoenix received $60 million. The county of Pima got $22.165 million. The millions in funding are expected to revitalize neighborhoods and entice more investors to buy foreclosures in Arizona.