Home Foreclosures Rise
I’ll be home for Christmas……if only in my dreams.
Sadly, but predictably, foreclosure activity has been rising across the country. Thousands of homeowners now face foreclosure in the New Year, as a result of flattening home prices and rising interest rates.
71,606 properties entered some stage of foreclosure this November. Translation, 1 in every 1615 households will lose their homes in the coming months.
In California, foreclosure activity has edged up 29% to 6051 new foreclosures, In November alone. San Francisco is seeing flat price appreciation and even a decline in prices in some area’s. Orange county saw a 42% increase in foreclosure activity, coupled with a drop in home sales prices for the second consecutive month.
Novembers new foreclosure filings reveal that another 3668 homes in New Jersey face foreclosure; 1743 in Las Vegas, Nevada, up 156%; New York new filings up 33% to 4702; Kentucky up 100%; Indiana 2800 properties reported entering some form of foreclosure, a 32% increase; Ohio reported 4968 new filings, up 5.7%. Colorado and Georgia take top honors, as the nation’s two highest foreclosure rates. Colorado reported 2687 new foreclosures, or 1 in every 681 households. Georgia didn’t fair much better, reporting 4416 new properties entering foreclosure, a 28% increase, effecting 1 in every 701 households.
A Katrina/Rita brightspot? The Gulf Coast states were the only area of the nation with declining or stable foreclosure rates. The exception to the Katrina silver lining was found in the state of Flippers, previously known as Florida. Florida reported 8872 properties entering some stage of foreclosure, a 16% jump, with the dubious honor of reporting the most foreclosures by any state. Florida’s present foreclosure rate is 1 in every 824 households, the third foreclosure rate average in the country.
Prediction: As payments on adjustable interest rate mortgages (ARMS) rise and home prices stabilize or decline, thousands of overleveraged, cash strapped homeowner’s will suffer in record numbers. The foreclosure effect will be felt first in regions of the country, overrun with novice speculators. Unfortunately, the drag and change in consumer sentiment will be felt by all home sellers. Home sellers and Realtors will face tough competition from the deals offered by banks and lenders, anxious to dump non-performing real estate assets off their books, as quickly as possible.
The upside… flippers will return to the sea, the thousands of newbie real estate agents will return to their roots, and experienced investors with deep pockets and an intermediate time horizon will successfully build upon their real estate portfolio’s for 50-80 cents on the dollar.