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Big Surprise: Forclosures up Sharply
By JLP | August 21, 2007
This from YahooFinance:
Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday.
The filings include default notices, auction sale notices and bank repossessions. The figures are the latest measure of the ailing housing market, which has seen defaults and foreclosures soar as financially strapped borrowers have failed to make payments or find buyers.
This shouldn’t be a big surprise to anyone. When you have people buying homes they can’t afford with crazy mortgages, you have a recipe for eventual disaster.
I think we all saw this coming. Now the big question is:
How bad do you think it will get?
I haven’t done enough research to really say one way or the other. However, I do think there’s been a sort of panic on Wall Street which means this thing might get overblown. It’s like they go from one extreme to another almost as if we are being played. Oops, there’s the conspiracy theorist in me rearing its ugly head.
Topics: Housing Market, Mortgages | 5 Comments »
August 21st, 2007 at 3:12 pm
I’ve seen some neighborhoods reporting an almost 50% foreclosure rate!
August 21st, 2007 at 11:30 pm
One of the big problems in this mess is that the tightening of credit doesn’t just affect the purchase of real estate. It touches many other parts of the economy.
People are watching their monthly payments go up and their equity go down which is causing them to cut back sharply on “nice to have” items such as new cars, consumer electronics, etc.
August 22nd, 2007 at 10:12 am
IMHO, it’ll get worse. Even with prime mortgage market, the banks were giving loans without regard to income. Someone with a perfectly fine 30-year fixed mortgage can loose a job and not be able to pay. Someone else may need to move but not be able to sell because a family with 90K salary can no longer get a 500K mortgage. I am not even talking about ARMs – I think until we are done with all of those payments increases we’ll have foreclosures.
Here we still have one bedroom condos selling for around 300K. How many young singles or old couples – the only potential customers for one bedroom condos – can afford to buy a place for 300K? Co-ops are cheaper, but they have big maintenance. As the prices come down people who need to sell cannot get their mortgage worth.
Out of curiosity, I just took a look at foreclosures in my area (Westchester cty, NY). Anything from 100K co-ops to 995K house. There was even one 19K one bedroom co-op, must be a tax sale or a dump (maybe I should look at it as an investement?). A 995K house seems to show that even “rich” may have problems. Or those who thought they were rich…
August 23rd, 2007 at 10:17 pm
All I can say is, if I had a bucket of cash, I’d be watching the local house prices and scooping up some land!
August 28th, 2007 at 8:50 am
Just my silly thinking, why so much of people buying the houses that they cannot afford? Doesn’t this mean that they are having problem in financial planning?