I promise I won’t keep talking about this forever, but it is worth pausing to note that foreclosures across the country are up 72% over last year–and 38% in just the last quarter. At this rate, foreclosures will likely hit 1.2 million this year.
It isn;t the super-heated markets on the two coasts that are cracking first. I was knocked out by the increase in Boston, but it seems Massachusetts is behind the curve. Instead, Georgia, Colorado and Indiana lead the country in foreclosures per household, with Nevada, Michigan, Texas, Ohio, Tennessee, Utah and Florida rounding out the top ten. Check out your home state.
There was a nice discussion on the last post about who wins in a foreclosure, but let’s spend a minute on who loses. Obviously, the families who bought these homes lose whatever they have poured into them — payments, improvements, heart and soul. Many were taken on a very expensive ride by mortgage companies and real estate brokers who have already collected their profits on the deal and moved on. Their neighbors won’t do well either, if they need to sell. Trying to sell a house in a neighborhood with houses in foreclosure is tough. (I know because I’ve tried.) Once the lender owns the house, they will usually offer to unload it at a rock bottom price, exerting a downward pressure on the real estate market for everyone else. Last summer when we talked about the crazy mortgages, we said “tough times ahead.” For some, tough times have already arrived.
