Welcome to a new series where we take a real estate headline that's making the rounds, dig into what's actually happening on the ground here in the Valley, and give you a straight verdict: fact, or fiction?
This week's headline: HOA foreclosures are surging nationally, and it's starting to feel like the next housing crisis.
What's actually happening
Homeowners associations nationwide filed nearly 285,000 liens against residents in 2025 — roughly one every 90 seconds — and the foreclosures that follow are climbing faster than mortgage defaults. There were more than 6,300 properties with HOA-related foreclosure filings in the first quarter of 2026 alone, up almost 40% from two years earlier. The cause isn't villainous HOA boards; it's insurance costs and empty reserves. Nearly three-quarters of HOA-governed communities nationally don't have enough saved to cover their own upcoming repair costs, and 91% of associations saw insurance premiums rise in the past year.
Arizona is squarely part of this story. Florida, Texas, California, Georgia, and Arizona together account for more than half of every HOA lien filed nationally in 2025.
Did we find an Arizona case?
We went looking for a specific, publicly documented Arizona property that actually went through HOA foreclosure — something to point to as a local example. We couldn't find one. That's worth noting on its own: despite Arizona's ranking among the top states for lien filings, a dramatic local foreclosure story hasn't surfaced in the news.
What this means if you're waiting to buy
If you're a buyer sitting on the sidelines hoping this trend eventually floods the Phoenix market with more affordable, distressed inventory, here's our honest read: don't count on it.
A few reasons why. Arizona's overall foreclosure rate remains low — around 1 in 750 homes filed in the first half of 2026, well below historical peaks. HOA foreclosures in Arizona must go through the courts; there's no fast-track, non-judicial process here like some states allow. And as of September 26, 2025, Arizona raised its homeowner protections significantly: a planned-community HOA can't even file to foreclose until an owner is 18 months delinquent or owes $10,000 or more in assessments — whichever comes first — and late fees, fines, and interest don't count toward that number. That's one of the highest thresholds in the country. A bill extending similar protection to condo owners has passed the legislature and awaits the Governor's signature.
There's also a broader housing shortage — an estimated 4 million homes nationally — that puts a floor under prices even where distressed sales do appear. And homes that do go through HOA foreclosure often come with baggage: deferred maintenance, or a looming special assessment the new owner inherits at closing.
Our verdict: Fiction
This is a real trend worth watching, but it isn't the crack that brings a wave of affordable inventory to the Phoenix metro. If your buying strategy depends on that happening, the numbers don't support it right now.
What's your take? Fact or fiction — let us know in the comments, or reach out if you want to talk through what's actually moving the Phoenix market right now.
Best Friend Advice. Expert Knowledge.
We put your interests ahead of the transaction and give you the same honest guidance we'd give a close friend. Sometimes that means moving forward. Sometimes it means waiting or walking away.
Backed by more than 20 years of Phoenix market knowledge, experience, and perspective.
