The WeBuyTucsonHomes Blog

The holiday season is finally past and the retail numbers coming in look grim.  Already companies are planning to layoff 1 million workers in 2009.  If the economic numbers get worse the layoffs could rise even higher, leading to a higher foreclosure rate.  I have already seen investment banks predicting 8 million foreclosures through 2012.  Rest assured Pima County will have its share of that 8 million.

I suspect the higher number of defaults came from the previous weeks low filing number.  For the week of Dec 8-13 2008, 216 N.O.D were filed in Pima County.  The total sum of first mortgage liens came in around 39.3 million while the Zillow Estimates came in around 42.5 million.  If you add most of the mortgages contained 2nd or 3rd mortgages at 15% of the first the total liens came in around $45.2 million dollars.  This means most houses are ~13% underwater and have very little chance of selling on the market.

Continuing a trend 85746 and 85706 both lead the way with 22 filings for the week which is up from the previous weeks.  85710 followed with 12 notices for the week.  Here is the graphical break down, and the subdivision with the most filings was: Gladden Farms.

Pima County NOD filings

The week of Nov 24-28 saw a low number of N.O.D.s filed in Pima county, but because a large “retirement home” missed a few payments, the total dollar amount of first mortgages ran over $74 million dollars.  The retirement home contributed over $45 million dollars in mortgages to the total, because of that the $45 million will be taken out in the calculations below.

The number of filings were down presumably to the short holiday week, but a surprising number of “luxury ($500,000 and up)” homes fell into default.  Usually one or two homes will fall into default every couple of weeks; the past week saw 8 home.  Following what many financial analysts have been lamenting, a couple of commercial buildings were found to be on the list.  The amounts were relatively small at only a few million dollars, but if the trend continues we could see discounts coming in commercial buildings and more cheap office space for rent.

A total of $29.1 million dollars were in default, not including the $45 million from the retirement home, with a Zillow value of $26 million dollars.  This was the first time in running this list that the values were more than the first mortgage.  This could have devastating effects on the banks holding the notes.  Usually in a short sale the banks will discount or remove the second mortgage to help facilitate the home sale.  However, if the home is now worth less than the first mortgage, banks may be even less inclined to negotiate and favor to take the home back(foreclose) rather than take a chance on a definitive short sale loss.  It will be interesting to see if this trend continues.

Further, this week I noticed more properties held 2nd mortgages in excess of 15% of the first mortgage.  The 15% standard 2nd mortgage will not be increased, but is of interest as the amount of 2nd mortgages could be much higher.  Also 85746 outpaced 85706 14 to 13 in NOD filings marking the first tim85706 has not lead the way in homes in default.

So here is the chart.(Upgraded to Office 2007 so the charts are “prettier”  :))

116 Notice of Defaults for Pima county

The Tucson La Paloma Resort & Spa and Westin Hilton Head Island Resort & Spa in South Carolina, financed via a $209 million loan from JPMorgan & Chase, is near default according to Standard & Poor’s. The loans were based on rising revenue. The harsh economic times have reduced revenues and rising cancellations have pushed the two resorts on the brink of default.

La Paloma could be on the brink of default

BAD NEWS FIRST

30 Reasons for the Next Great Depression

Homebuilders Index is at an all time low.
Guess that is what happens when you overbuild, ask the telephone companies from the dot come bubble.

GOOD NEWS
HUD relaxes requirements for Hope for HomeOwners

Mortgage rates are going down

Freddie Mac and Fannie Mae suspend all foreclosures until after the holidays!

The Arizona Daily Star ran an article reporting the increased foreclosure sales figures for Pinal county.  According to the article 45% of the existing home sales in Pinal county were foreclosure driven.   That means of the 3,355 home sale transactions 1,515 were from foreclosure.  I can’t find any mention of Pima county but will be on the lookout.

This past week Pima County listed 185 Notice of Sales filed for the week of November 2-7. The first mortgage on the properties totaled roughly 34.4 million vs property values according to Zillow of 34.7 million.  Now remember this is only the first mortgage position and all most all of the properties list 2nd and sometimes 3rd positions. The second position can vary anywhere from 5% all the way up to 40%. Take a low end average 20% and the liens against the properties increase to over 41.2 million. This puts almost all the properties 19% “underwater.” Now factor in that Zillow maybe overestimating housing prices and some home owners could be even further underwater!

Looking at the chart we see 85706 again led the way with 24 notices filed. 85746 was second with 19 and 85711 was third with 14. Some interesting things to note were a few large real estate investing companies, both national and local are seeing notices filed against properties they own. Why do I mention this? They were speculators in some instances, as the filings were on very new and high priced homes, and also to show that the financing crunch paired with the downturn in housing is hitting everyone hard.

Here is the chart with 185 Notice of Sales for November 2-7, 2008

This past week 200 foreclosures were filed in Pima County totaling over 36.7 million dollars in first mortgages. 85706 continued to lead the county in Notice of Sale filings, with 27 filings and 3.6 million dollars in first mortgages. 85717 had the second highest filings with 17 and 2.7 million dollars in first mortgages. Here is the graph.

This past week saw 198 Notice of Sales for Pima County meaning a rough total of 35.8 million dollars entered into a final stage of preforeclosure. Once again the zip code of 85706 led the way with 22 notices followed by 85713 with 14 notices.

Here is the chart looking at the number of notices per zipcode.

I thought it would be interesting to post the weekly statistics from the notice of sale list. This is a list that I comprise every week, via the Pima County Recorders Page. The data is collected by counting the “Notice of Sales” and associating the address with the correct zipcode. (Note that there is more than one way to file for a foreclosure in Pima County, but Notice of Sales are used for Deeds of Trust, which is the most common lien banks use.) Thus this is not a definitive number, but should be a reasonably accurate number based on my data gathering techniques. More data will be added in the coming weeks, and a chart of all 2007 notice of sales is in the works.

The past week saw 158 “Notice of Sales” filed, valued at roughly $30 million dollars in property. (Note that I only calculate the value based on the first mortgage. So if a home is encumbured by more than one lien only the first lien is used. Thus this number could be undervalued by up to 30% or more. A high degree of error, but at this time the data gathering methods do not allow for more accuracy. This will be something I will continue to work on improving.) Continuing trends include: over 95% of the deeds of trust entering foreclosure where originated in 2005-2007, the highest concentration of filings occur for the 85706 zipcode, and areas of new home developements show increasing numbers of foreclosure starts.