Arizona's Paradise Valley Now 'Foreclosure Alley'?

Hard times in Paradise
The foreclosure crisis catches up with a wealthy, exclusive community in Arizona that once considered itself immune.

By Melinda Fulmer of MSN Real Estate



In 2008, it looked as if Paradise Valley, the wealthiest, most exclusive community in Arizona, had neatly side-stepped the foreclosure crisis.

Only 38 foreclosures were recorded in this 16-square-mile town that year. Indeed, the median home price for resale detached homes reached an all-time high of $2 million in mid-2008, according to MDA DataQuick, even as values plummeted elsewhere.

"People were buying up million-dollar homes, tearing them down and rebuilding them," says Jay Butler, director of the Arizona Real Estate Center at Arizona State University's W.P. Carey School of Business.

The fall

Last year, the bottom dropped out. Like many other luxury-home markets, Paradise Valley joined the foreclosure crisis late: As the economy worsened, companies lost clients and executives lost bonuses or jobs. Affluent residents ran through their savings and credit. And banks, once reluctant to foreclose on major depositors, started taking estates back.

People began talking of "simplifying their lifestyle." ........(more)

The complete piece is at: http://realestate.msn.com/article.aspx?cp-documentid=23875607>1=35006

It warms my heart to see millionaires have to fly coach.