What Causes a Home to Reach Foreclosure?

foreclosureForeclosure is the process by which a lender takes back ownership of a property from whomever borrowed money to purchase the property. This occurs when the borrower no longer makes the mortgage loan payments on time. So what causes someone to reach foreclosure on their home?

Arizona operates as a title theory state, which means that the lender holds the title to the property until the underlying loan obligation is paid in full. This gives the lender the right to foreclose on the property if the borrower defaults on the loan. The primary method of foreclosure in Arizona is known as non-judicial foreclosure, meaning that foreclosure does not involve a court action but requires notice commonly called foreclosure by advertisement.

Last year in Arizona, 34,387 properties completed foreclosure. This number may seem high, but with the market slowly turning up, the Phoenix-Mesa-Glendale housing market showed a decline in foreclosure rates in 2013, and that number is predicted to decline even further. This figure can be intimidating to those interested in keeping their home or even buying a new one, but there are plenty of reasons why someone could succumb to foreclosure besides just living beyond their means.

Negative Equity plays a major part in leading to foreclosure. This is where the borrower owes more on their loan than the house is worth. Since lenders will very rarely give a higher loan than the actual worth of the house, negative equity occurs when the price of the house drops, most likely from an economic downturn. Homeowners with equity have options if they run into financial trouble, such as refinancing. Foreclosure is typically the only option that homeowners without equity have.

There are a lot of factors that could contribute to a foreclosure that has nothing to do with the housing market. An illness or death in the family, especially occurring with the head of the household, can quickly result in a foreclosure if the mortgage is left unpaid due to other financial obligations. Divorce can play a major factor in a foreclosure, but the most common situation is when someone refuses to leave and the other refuses to pay the mortgage.

If you find yourself in the midst of a foreclosure, AllHomesAZ.com can help. At All Homes AZ, all consultations for foreclosures in Phoenix are free. No matter the situation, we will work with you to help settle your foreclosure at no cost. Please contact us today and get cash for your home – in any condition – in as little as three days!

Phoenix Real-estate Market Expected to Grow In 2014

realestatemarketPredicting that real estate transaction volume in 2014 should reach up to $340 billion (from $290 billion in 2012), confidence in the real estate market is now thankfully improving. With an increase in employment and a gradually improving economy, real estate market predictions call for a slow yet steady recovery. According to an article in Forbes, the Phoenix-Mesa-Scottsdale housing market may be ahead of most of the nation in regards to this rebound.

To compile this data, Forbes teamed up with the Local Market Monitor, and tracked home prices and economic factors in more than 300 housing markets. Out of these 300 markets, the top 20 housing markets to invest in for 2014 were found, otherwise known as “Best Buy Cities.” Phoenix was included in this “Best Buy Cities” list.

Pulling data from metropolitan areas with a population of at least 575,000 people, choices were ranked primarily from four key factors. Each of the “Best Buy Cities” has a high population, healthy job growth, somewhat low housing prices, and are considered “under-valued,” making investment opportunities fairly low-risk for smart buyers that know not to overpay. A healthy local economy is also an important consideration for investors, since there is no point in purchasing a home if the population decreases over time. Overall potential opportunities and prospects for the future are increasing in these “Best Buy Cities,” which is why they were chosen.

According to the aforementioned article, Forbes and Local Market Monitor used a metrics dubbed the “Equilibrium Home Price.” The EHP is the value that essentially “tracks what the average price of the market should be, if speculation, weird distortions in the local income and other factors (like the housing collapse) were not present in the market.” This was an influential factor that made the Phoenix-Mesa-Scottsdale housing market a suitable candidate for the list of “Best Buy Cities” because the actual average home price is currently $196,035, and an EHP is $216,373, a 41 percent three-year growth forecast.

While the Phoenix housing market is still in recovery, many local real estate experts are confident in the continued turnaround in 2014. If you are looking to sell your home within the Phoenix area, now is the best time to do it! Please contact AllHomesAZ.com today for a free home appraisal and consultation with one of our knowledgeable agents.