Foreclosure - Foreclosure Figures Outnumber House Sales

Foreclosure Figures Outnumber House Sales

March 4th, 2008

More foreclosures are being listed than the number of houses being sold in a month. This is the position in many states of US. The western part of the country, especially Nevada is badly hit. During the housing boom prices had soared but now they are tumbling down. In California about quarter million properties were in some stage of foreclosure in 2007. The figures do not give the complete picture because some manage to get sold before the auction – but nevertheless the numbers are alarming. One of every 52 homes have been affected or 1.9% of the residential units. Nevada topped the list as regards percentage with one out of 30 houses sliding into the foreclosure zone or 3.4% of all the units. Michigan closely followed although it had not been part of the housing boom. Florida like Nevada had seen a frenzy of activity in the real estate industry but is now paying the price with an equal frenzy in foreclosures. The blame is being given to reckless speculating.

Politicians are working with lenders, borrowers, communities and government bodies at state and federal levels to work out a solution. There are legislative proposals, some measures have been put into effect but despite all this foreclosures continue to run apace.

RealtyTrac reports that during January there were 153,745 foreclosure postings in the entire country. It plays down the sale of only 43,000 newly built houses. The foreclosures are negatively impacting on the lenders and borrowers but they are opening up new opportunities for newcomers to buy houses at bargain prices. Foreclosed houses are being sold quickly – even at a loss for the owner. They do not want to play the waiting game. This is further lowering prices.

New house have been completed but there are no buyers. There was a record number of 197,000 houses last December. It came down to only 195,000 in January. The average age of these houses is only 6.7 months. During the peak boom houses with less than half the age were sold off. But now there is delay – considerable delay. The states with the lowest foreclosure inventories are those that missed out on the housing boom and are also backed by relatively better economies. In South Dakota there were only 50 foreclosures in 2007. In Vermont, Maine, West Virginia and North Dakota the rate was below 0.1%.

Despite palliatives no solution has as yet not been made.