Quick Update on "Shadow Inventory" Myth and AZ Real Estate

Lender Processing Services just published their latest Mortgage Monitor presentation covering the month of July. This allows us to compare Arizona with the other 49 states and the country as whole. Arizona home loans more than 30 days late but not yet in foreclosure stood at 5.9%, the same as the previous month. Loans in foreclosure dropped from 2.9% to 2.6% and total non-current loans fell from 8.8% to 8.5%. Arizona continues to improve its delinquency rates at the fastest speed in the nation, with the total non-current rate down 24.8% in the last 12 months. California is runner up with a fall of 19.8% and Michigan comes third with a 15.7% improvement. Florida is still the worst state with a non-current rate of 21.1%, but at least it fell by 5.4% in the last year. Still getting worse are Arkansas (up 7.4%), New Jersey (up 7.4%), Hawaii (up 5.1%), Vermont (up 4.7%), Connecticut (up 3.8%), Washington (up 3.4%), New York (up 2.5%), Maine (up 1.5%) and Pennsylvania (up 0.5%). 

 Arizona now ranks 36 out of 50 for overall non-current mortgages. In February 2010 we were number 5. The really shadowy "shadow inventory" is represented by an excess of loans that are late but not yet in foreclosure. These are highest in Mississippi (13.1%), Nevada (10.4%), Georgia (9.7%), Louisiana (9.4%) and Alabama (9.4%). In comparison Arizona's rate of 5.9% is not far above its long term average of 4.5%. Arizona's main problem now is the relatively large percentage of homes that are underwater. Lender Processing Services estimate's Arizona's underwater loan rate at 28.4%, which puts us in 5th worst position behind Nevada (54.7%), Georgia (42.8%), Florida (33.1%) and Michigan (29.8%). Cromford Daily Observations