Foreclosure1 Blog

There are 236 zip codes in the Bay area; of these, 25 have gone into the red with foreclosures closing in like pincers. The epidemic is concentrating in certain localities inhabited by the marginalized minorities and in places where there has been hectic building activity in the recent past. It was inevitable that the house market balloon would burst with many opting for ownership units without making down payments and agreeing to initial low interest.

Antioch (zip code 94531) with a 15% drop in house prices ranked first in the nation. 271 houses were gobbled up by foreclosures 923:1000) from January to August this year. Other foreclosure offenders covered two zip codes in Richmond and Concord with a ratio of 15:1000.

Expert opinion is that the worst affected are those places where there has been zooming housing activity and where people have moved into houses for a minimum consideration. It is the lax borrowers who are the victims of foreclosures. However some of the elite towns like Calistoga, Ross and Brisbane have recorded zero foreclosures from January to August this year. Another view is that the coastal regions will survive because of relatively stronger economies.

Generalizations are difficult because some of the high priced areas (zip 94920) in the Bay Area are now feeling the foreclosure pinch with $1.3 million houses slipping out of control. But the overall picture is that Bay Area is not that badly infected by the foreclosure bug as other regions. The first three foreclosure rankers are California, Ohio and Michigan.

Those areas that attracted first-time buyers with risky loans are more likely to be taken over by lenders when the borrowers stumble, because these units spell good investment when the market rises. The whole thing is a matter of timing. Many opted for risky mortgages in good neighbourhoods and managed to build up a good equity during the boom years. Today even with rising interest the value of the house is more than what it was at the time of purchase. So they can either sell or negotiate for a new mortgage. But those who bought during the last few years have a different story to tell. It is those who recently went for sub-prime mortgage who are in foreclosure trouble. Their calculations about rising property prices went awry. Each zip code has a different foreclosure story to narrate.

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