In a recent post I looked at Phoenix bank-owned MLS listings (check it out) (only one-third as many as last November!) and the Phoenix shadow inventory of homes but I didn’t look at mortgage delinquencies.

Phoenix Shadow Inventory Trends

For Phoenix shadow inventory trends I looked at;

  1. Phoenix homes the banks have already foreclosed on but which the banks haven’t yet put in the MLS (the number of homes in this category has been generally flat for most of the last 12 months), and


  1. Phoenix homes that are in the process of being foreclosed on but which haven’t yet gone to the foreclosure auction (the number of Phoenix homes in this category has fallen by about 40% since last November).

Phoenix Mortgage Delinquency Trends

What I didn’t look at in that post was the earlier phase in the foreclosure pipeline — Phoenix homes that are behind on their mortgage payments and in jeopardy of being foreclosed on.

Not all of the homes that are delinquent in their mortgage payments will be foreclosed on but all foreclosures will have been delinquent. So mortgage delinquency trends tend to become foreclosure trends, and foreclosure trends tend to become bank-owned MLS listings trends.

Ultimately, the idea here is that as the number of bank-owned MLS listings decline, Phoenix home prices are more likely to rise.

I couldn’t find a time-series of the mortgage delinquency rates in Phoenix (yet) but I did find a press release from TransUnion that shows that for Arizona as a whole the number of mortgage delinquencies fell 27% from the 2nd Quarter (April – June) of 2010 to the 2nd Quarter (April – June) of 2011.

Phoenix Foreclosure Pipeline Shrinking

Transunion shows that the number of Arizona homes likely to enter the far end of the foreclosure pipeline is falling significantly, down 27% in one year.
That means the number of metro Phoenix homes that reach the other end of the foreclosure pipeline — Phoenix bank-owned MLS listings — is likely to continue to fall in the future as well.

My Conclusion

Phoenix bank-owned MLS listings will continue to trend lower and, eventually, a tipping point will be reached where Phoenix home prices will start to trend upward again. (Not all Phoenix zip codes will turn upward at the same time but that’s another story.)

If the government doesn’t muck it up with their housing rescue programs, I expect we would then see many years of generally upward Phoenix home prices.

If you were considering buying a home in metro Phoenix, sooner is probably better than later in most zip codes.