ARIZONA DAILY STAR:  Sun., June 1, 2008

Foreclosures push down your home's selling price

Appraisers now being forced to rely on depressed valuations in some areas

By Christie Smythe

 

The rising number of foreclosures is reducing property values in a possibly unprecedented way.  Not only are foreclosed properties flooding the market, but they are also becoming the only standard of comparison for other homes sold in some areas.

Appraisers typically ignore foreclosures in property valuations, but now in some areas they have no choice but to use them.  Foreclosed properties usually are not included in appraisals because they are considered under "duress" and not reflective of fair market value, said Bruce Smith, of Equity Valuation Services.  However, "when those become predominant in the neighborhood, then they become the market," Smith said.

Nearly 14% of existing houses sold in the Tucson area in April were repossessed by lenders, according to the Southern Arizona Housing Market Letter published by market consultant John Strobeck.

Housing prices in Tucson have already started to fall after a prolonged sales slump. But rising numbers of foreclosures will likely push those prices down farther, according to the Pew Charitable Trusts.  The organization reported that more than 60% of Arizona homeowners will see their property values drop as a result of foreclosures.

Full story:   http://www.azstarnet.com/allheadlines/241651