Foreclosure Listings Still Growing, Worsening Oversupply
April 14th, 2009 by 
Joseph Smith
Foreclosure listings in Arizona and in other states are bursting with listed foreclosure properties and other existing homes for sale, as foreclosures continue to overload the market and as surplus new homes stay in the market for months.
According to Harvard economist Edward Glaeser, there is an oversupply of 1 million new homes across the country and it would take two years before a balance of supply and demand can be seen in the housing market.
Glaeser’s estimate is however very optimistic, according to other analysts. California real estate consultant John Burns said there was overbuilding in many states and there is no need to build new homes.
The oversupply of homes can be seen in the 14 million vacant houses, apartments and condos nationwide, with 9.4 million units in foreclosure listings. Between the years 2002 to 2007, when households rose by only 6.7 million, housing units soared by 8.65 million.
An estimated 1.5 million families are added to household figures annually in the previous years, but factors such as delayed marriage, financial difficulties and declining immigration numbers have reduced the growth rate of households.
In Maricopa County, 117,000 housing units received foreclosure filings in 2008, making Arizona foreclosures among the highest nationwide in 2008, according to studies by foreclosure tracking firm RealtyTrac.
Phoenix officials said the failure of over 700 savings and loan enterprises in the 1980s also caused a mortgage and real estate crisis in Arizona, but they said the 1980s crisis, which mostly affected developers and construction firms, was more manageable than the current crisis of overloaded foreclosure listings.
While bursting foreclosure listings batter the housing market, cause neighborhood blight, eliminate lenders’ profits and force out borrowers out of their foreclosed homes, some groups are benefiting from the crisis: homebuyers, investors, real estate brokers and auction businesses.
The National Association of Realtors said existing-home sales in February increased by 5.1 percent to 4.72 million units compared to sales in January, the largest sales growth in 8 months.
The sales growth was largely caused by increased sales of properties from foreclosure listings and the increased number of first-time homebuyers who were taking advantage of low mortgage rates, tax credits and the attractive prices of homes in foreclosure listings.
