Phoenix sees signs of rebirth in bust
Foreclosures fuel a low-end boom
PHOENIX - Every weekday morning, Lou Jarvis drives the suburban streets looking for investment gold: a family that will lose its house in a foreclosure auction within a few hours.
If the property looks promising, Jarvis puts in a bid on behalf of any of his dozens of clients eager to become landlords. When he wins, he offers to let the family stay in the house and rent for much less than their mortgage payment.
As the city endures one of the largest tumbles in housing prices for any urban area since the Great Depression, there is an unrelenting stream of foreclosures from which to choose. On some days, hundreds are offered for sale at the auctions that take place on the plaza in front of the county courthouse.
There is also a large supply of families who can no longer qualify for loans. And that is prompting a flood of investors like Jarvis, who wants to turn as many as possible into tenants in the houses they used to own.
Real estate got just about everyone into trouble in Phoenix, and the thinking seems to be that real estate is going to get everyone out.
Absentee buyers bought nearly four of every 10 homes sold in the Phoenix metropolitan area in April, according to the research firm MDA DataQuick. That is up 50 percent since late 2007, and is nearly the same ratio as at the 2005 peak.
Once again, just about everybody seems to be buying as many houses as they can, positive that will make them rich - or at least allow them to recoup some of their losses.
Jarvis, 47, who owned a wood molding company that thrived in the boom and faltered in the crunch, also made mistakes. Last spring, he contracted for three new homes in the distant suburb of Copper Basin, convinced that real estate was bottoming.
He was wrong. He managed to get out of two of the contracts but had to buy one of the houses, which is now substantially under water.
"You need to buy when there's blood in the streets," he said with a shrug. "Even if it's your own blood."
