The number of foreclosed properties and cheap houses for sale got even bigger in Arizona last year, causing the state to be ranked among the top five U.S. regions in terms of foreclosure rates. Although the national housing market has shown some signs of improvement, economists believe that 2011 will be much the same as 2010.
Foreclosures in Gilbert, AZ, and in other key metro areas of the state remained high last year. According to housing industry analysts, the main problem for the area’s housing market is that it has some of the biggest supplies of unsold foreclosed houses. Despite an improvement in existing dwellings sales during December 2010, analysts are predicting that Arizona as well as the rest of the country will need a few more years before it sees a well balanced housing industry.
Even if the job market achieves some form of improvement in 2011, the huge number of Arizona foreclosures will continue to drag the state’s economy down, analysts further added. Foreclosed dwellings are also preventing housing starts statistics from improving in the state, analysts also asserted.
They also warned that the nationwide increase in sales of cheap houses for sale and distressed homes should not make people over optimistic since the market will be coming from a very deep bottom and a single month improvement in sales is not enough to proclaim a recovery. Housing data also showed that, as of December, the U.S. home market is sitting on an inventory of unsold houses covering eight months of supply.
For 2011, the Federal Reserve has estimated that a further 2.25 million properties will fall into foreclosures. This will further depress housing prices and cause more homeowners to go underwater, the Fed has stated. With this much unsold distressed homes available in the market, home building will continue to tank in the next two years or so, analysts have predicted.
Despite dire predictions that the Arizona market and the rest of the U.S. will continue to be flooded by cheap houses for sale, analysts stated that at least, the housing market seemed to be bottoming out in most regions. They added that the climb from the bottom will be long and arduous, but the country is already starting that climb this year.