Foreclosures in Arizona are dropping. New numbers out last rank Arizona 34th nationwide in foreclosure filings, and the state appears to be leveling out. Lenders started the foreclosure process on more homeowners nationwide in the third quarter, after the foreclosure moratorium was lifted.

Michael Bronska with ASU’s W.P. Carey School of Business said fewer filings simply mean homeowners are taking advantage of high prices right now and selling is one option used to get out of an unaffordable mortgage, rather than go through a foreclosure process.

“And even though you drive on every major street and you see a new multi-family development rising  up from the ground, I think that we still have a shortage — not just in Phoenix, but nationwide,” he said.

Bronska said in Phoenix prices are rising faster than in other comparable markets and that is attracting more people to sell and pay off unaffordable mortgages. He said the long term risk is if owners and investors dump homes, there’s a negative effect on re-financings and home values — like happened in 2008-2012 during the Great Recession.

“Some people believe that’s contributed to an increase in homelessness because with a smaller supply, we’re driving rents up, which then drive certain demographics out of the market,” he said. Bronska said for a little over a 10-year period, Phoenix wasn’t really building homes or apartments — and that has driven prices exponentially higher as the population continues to grow.