To Our Esteemed Members and Colleagues:
The past few years have been challenging ones for our industry, to say the least. In the first quarter of 2020, Covid hit the United States. The Stock Market collapses. Businesses are shut down by the government because of health risks. Essentially all non-essential business was halted. Masks were worn, constantly...
In February of 2020, the National Unemployment Rate was at a five-decade low of 3.5%. In April, it hit 14.7%, the highest rate since the Great Depression. That is how quickly things changed.
Mindful of the last housing collapse, the Government, at both the State and National level made moves to prevent another housing collapse. Restraints and moratoriums on Evictions and Foreclosures quickly were implemented. And extended. And extended...
Meanwhile, the Arizona housing market was BOOMING! In 2019, the average home price increased 6.4%. In 2020 - 14.5%; In 2021 - 25.3%; and YTD? - 16.1%. If we continue at that rate for the remainder of the year, that number would be almost 50%!
We recognize the toll that this "Perfect Storm" has had on our membership. To that end, we are offering a $99 rate for membership for the remainder of the year. This will allow everyone to have member rates for the Convention, future luncheons, and the Annual Meeting.
Many factors contributed to this. People are moving to Arizona in droves, at the rate of approximately 10,000 new people per month. Air B'nB's are the new way to make money. Homes are being purchased by investors for exclusive use as short-term rentals. In addition, investors are betting on the increase and are buying homes for investment at retail prices. The supply of homes is overwhelmed by the demand. Economics shows us that as supply shrinks and demand increases, the commodity is more valuable and the price increases, thus the increases listed above.
When you combine the moratoriums with the "smoking hot" real estate market, we see a net near collapse of our industry. And no one is going to lament the restructuring or losses of our industry. The Government is not going to "bail us out."
The Cromford Report tells us the following regarding Maricopa County Notices of Trustee Sale Recorded: In 2018, an average of 517 recorded each month, in 2019, an average of 456 recorded per month. In the first three months of 2020, an average of 448 were recorded. The...the bottom fell out. For the remainder of the year in 2020, there were 85 foreclosures filed per month. In 2021, an average of 97 foreclosures were recorded each month. That is more than an 80% decrease in foreclosures, for an extended period of time. Good for the economy as a whole, but not good for the Default Industry.
The moratoriums put many of us in a "wait and see" mode. And we waited...and waited...Finally, the restraints were mostly removed on December 31, 2021. That was a plus for us but, what of the "smoking hot" real estate market? Why lose your home to foreclosure when you have substantial equity building in your house daily?
The net result of these two phenomenon's has resulted in a restructuring of the way we do business. We have downsized, some both in staff and workspace. We got PPP loans where we could. In short, we have "patched our vessels" and continue to do business as best we can.
Thus, for our industry, we are left fighting "The Perfect Storm." And we will continue to fight as there is one constant in life, things change. Times change. The Fed has begun increasing interest rates, thus slowing the purchase of homes. But that is a slow process. And, as stated, we still do not have enough housing to accommodate the people moving here. The Cromford Report shows an average of 321 foreclosures recorded per month for the first
5 months of 2022. Not up to pre-Covid standards, but moving in the right direction.
And how has all of this impacted our Trade Association: The ATA? We weren't able to have our monthly luncheons. We canceled our last two conventions. While we have monitored legislation that may impact the industry, there has been nothing of note to be concerned with. The net result? We have lost members. Many can't see the value in the expenditures to have representation in the Association.
We need to rebuild. We need to grow our membership again. The things that we do are important:
Educate our members
Monitor and effect change in legislation that is beneficial to our industry and its clients
Provide a network of informed membership that fosters best practices
To that end, reach out to your clients, your vendors, to your peers. Let them know about the ATA. Get them involved. Our new website makes enrollment simple. We recognize the toll that this "Perfect Storm" has had on our membership. To that end, we are offering a $99 rate for membership for the remainder of the year. This will allow everyone to have member rates for the Convention, future luncheons, and the Annual Meeting. Go to our newly redesigned Website: https://www.arizonatrusteeassociation.com and register immediately!
We have slowly been regrouping. Luncheons have begun again. We are holding our next Convention and Education Seminar in spectacular (and cool) Flagstaff, AZ for the first time ever. We have a great list of speakers, topics, and entertainment set up. Make sure you sign up - immediately.
Thank you for your time and your interest. I look forward to seeing you all in Flagstaff!
Best Regards,
Paul T. Rhodes, Jr.
President
Arizona Trustee Association
