The WSJ runs an article this morning profiling the former boom town of Maricopa, Arizona:
Builders rushed into this one-time agricultural crossroads during the housing boom. They put up beige stucco houses on winding streets, with names like Heavenly Place and Good Vibrations Lane. They lured young people who couldn't afford homes in nearby Phoenix or its costly suburbs. The population soared to 37,000 last year from 1,400 a decade ago, making Maricopa one of the nation's fastest-growing towns.
Now, it's become a dead end for some of those people.
"We're trapped," says Tracy Campbell, as she watches her 2-year-old daughter romp on a playground.
The rest of the article can be read here.
Maricopa is a compelling example of the boom and bust of Arizona communities because virtually the entire town is going through this together. But the experience detailed in this article also describes many areas in the Phoenix metro area - particularly on the outskirts where farms were rapidly turned into subdivisions during the middle part of this decade. I moved to Phoenix in 2005 at the height of the boom and it was difficult to describe to people who had not been here. Literally thousands of homes were being built as far as the eye could see in some areas. It was typical to see 200 people show up at a lottery drawing to win the right to buy one of these houses (typically only 2 or 3 names would be picked each weekend in each new community).
And now, many of those homes that were built and sold are extremely far underwater and being foreclosed upon. People are making the choice that even if they can afford the mortgage, they are so far underwater due to surrounding foreclosures that it is smarter financially to walk away. Their credit will be repaired much sooner than their home will again be worth what their mortgage is worth. And in the meantime, they will save hundreds every month renting. That decision, of course, exacerbates the problem, but seems difficult to stop at this point in many of these newly built neighborhoods.
For those not living in Arizona, this handy foreclosure map provided by the Arizona Republic shows some of the fallout in every community. And while monthly foreclosure notices in Maricopa County have diminished somewhat from their high last year (over 8,000/mo), they are still very high (over 6,000/mo) and expected to continue at a rapid pace.
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