Southwest Valley has been heavily hit by foreclosure homes. The total number of foreclosures in the first half of 2008 in Goodyear, Avondale, Tolleson, Litchfield Park, and Buckeye were 2,195. This is an increase of 413 from what it was last year during the same time. It has been found that the increase in this real estate problem in the Southwest Valley has been due to heavy increase in the foreclosures in Litchfield Park and Tolleson. It has increased the number of foreclosures in the Southwest Valley by 563 percent and 665 percent respectively. It has been seen that apart from the poor income areas, those areas with higher income have also fallen into foreclosure trap.

Other than high loans, an additional $40 per month on HOA fees has also led to foreclosure on many homes. The Southwest Valley has been highly affected as many new homes were constructed between 2002 and 2005 whose homeowners got trapped into subprime loans in a bid to buy larger homes for themselves. About 60 to 70 percent homes in Goodyear are owned by banks. Though sales have gone up but the prices have fallen down greatly. The average foreclosure rate in Avondale and Buckeye is greater than the Maricopa County.

The first time buyers are taking the advantage of this situation and buying their real estate property at a price that they could have never thought. According to real estate agent Greg Marthaler, the primary reason behind the increasing foreclosure rate in the Southwest Valley is the quick profitable mentality of the investors who purchased homes. Foreclosures affect the whole community badly as has been seen in Avondale where with every single foreclosure, the HOA fees goes up for other residents too. As president of the Los Arbolitos Homeowners’ Association in Avondale Kent Miller said, “When one home forecloses, everyone has to pay.”

Tolleson was found to be a prospective market for the real estate investors. But as the market declined, many fell into the foreclosure problem, which in turn decreased the market value of the homes, a price much lower than what it cost when purchased. It is assumed that that the areas in the Southwest Valley that are farthest from Interstate 10 might take a bit longer duration to come out of the problem due to the increase in the price of energy and gas. It is envisioned that the five year adjustable rate mortgages as a result of reset in 2010 might lead to even worse a foreclosure scenario.

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