Phoenix Housing Market Expected to Recover in 2034

Phoenix Housing Market Expected to Recover in 2034

Many homeowners are going through an unprecedented tough time in Phoenix, AZ due to double digit unemployment and crashing house prices. Struggling homeowners having a hard time paying their mortgage every month want to know when this hardship will end. The answer, unfortunately, may not be anytime soon.

While unemployment is projected to be back to pre-recession numbers by 2014, the housing market in Phoenix may take longer to recover. According to Money Magazine, Phoenix is not expected to fully recover until 2034! Full recovery, in this situation, is defined by the balance of supply and demand when it comes to home inventory. The following is a list of the Worst Housing Markets':

Nevada 70% underwater, Recovery forecast 2033

Arizona 51% underwater, Recovery forecast 2034

Florida 48% underwater, Recovery forecast 2031

Michigan 39% underwater, Recovery forecast 2022

California 35% underwater, Recovery forecast 2028

Why is recovery taking so long in Phoenix? The main culprit is the high number of foreclosures. Many struggling homeowners are choosing to simply walk away from their house if they owe more than it's worth rather than seeking other responsible alternatives to foreclosure, such as a short sale.

Foreclosures drastically reduce the price of a property in a neighborhood and add financial burdens on the community due to vandalism, break ins, increased drug activity, and other costly potential problems associated with abandoned houses.

The decreased property values then cause more homeowners to strategically abandon their houses, leading to a further drop in property values and increases in crimes, and this vicious cycle continues.

One of the best ways to try to speed up recovery is to consider other alternatives to foreclosures, such as working with the banks on a loan modification, loan forbearance, or a short sale. These options will either keep the homeowner in their houses or allow for a sale to occur without drastically reducing property values.

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