Foreclosures in the Active Adult Communities

With today days real estate market I get asked about foreclosures all the time. Specifically about foreclosures in the adult communities. As people are looking thru the listings from our website (Active Adult Communities in Arizona) they don’t see many foreclosures. I am not hiding them, or keeping them from the selection available, I promise.

It is the nature of the buyer in Adult Communities. They are much more conservative. Many if not most, purchase with cash. If they require a loan, the amount down is usually greater than 10 or even 20% and the loans are all fixed rate loans. Only investors in those communities purchased with interest only, adjustable loans. And most new build communities did not sell to investors.

So we don’t see many home foreclosures in the adult communities. When they do come on the market, many times was an investor that got in over their heads, or some major personal issue, or the property passed on to the family and they couldn’t handle paying the additional mortgage.

The result, the housing prices in the adult communities have not been affected by foreclosures like the all aged communities. Instead, the conservativeness of the buyers, and the balance of retirement accounts has kept the buyers away, bringing the prices down in those communities.

In conclusion, the adult communities see far fewer foreclosures, and though the prices have come down with the real estate crisis, they prices have not come down as much as the all aged communities.

Foreclosures and the Adult Communites

Although there are no adult communities within McCormick Ranch, our initial website is focused on Active Adult Communities and we work with many 55+ buyers.   

We are seeing lots of numbers being published for the ratios of Bank Owned and Short Sale properties in the valley.   We are not seeing those same numbers in the Adult Communities.   Since it is a cold rainy day, I have been playing with numbers and really surprised myself with what I found!

Taking only single family detached homes in the entire MLS for the valley, a total of 41,832 this morning, 10,796 of them were Bank Owned and an additional 9,003 were Short Sales.  Those numbers round off to 25% of the single family homes on the general market are bank owned and another 21% are short sales.  

Current MLS Single Family Homes on the market, with Bank Owned and Short Sale

Current MLS Single Family Homes on the market, with Bank Owned and Short Sale

 

 

BUT when you look at the Active Adult Community 55+ single family homes, there are a total of 2819 on the market.  Of that 2819 only 52 are bank owned and 63 are short sales which works out to 2% of the homes are bank owned and another 2% are short sales.

Current active single family home listings in adult communities comparing bank owned/ foreclosure and short sale

Current active single family home listings in adult communities comparing bank owned/ foreclosure and short sale

 

 

HMMMM  kinda makes you wonder.    Our 55+ citizens have indeed saved for their retirement homes, their financing is minimal and their risk taking days are in the past.

There were very few zero down,  or investor homes sold in these communities in the 2005 and 2006 sales surge.    I believe it is the investors who did get in to these adult communities, that are making up the Bank Owned and Short Sale properties.