Repo Homes Numbers Rising

Posted on May 6, 2008
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In the US, repo homes continued to jump in the seventh consecutive quarter. It has doubled since the previous year. According to RealtyTrac one out of 194 houses are trapped in the foreclosure net for the seventh running quarter, without break or respite. The increase is by 112% from the previous year during the same first quarter.

On an annual basis foreclosures have risen in 46 states and 90 big metropolitan areas. In all 649,917 properties have been foreclosed. The fall out of zooming house prices is still being felt in most of the states. At that time people grabbed sub-prime risky loans to get into the property business and also for residential purposes. Experts from RealtyTrac opine that the end of this year will most probably see the peaking off of foreclosure activity. The top ranking foreclosure offenders during the first quarter are Nevada, California, Arizona and Florida.

The frenzy in housing activity had led to inflation of house prices and this has now begun to slide. The worst housing crisis of the century kicked off in 2006. The states that had seen the maximum building boom is now flooded with unsold houses. Some are valued at less than half the loan amount. This oversupply of houses is depressing the market and forcing the owners to walk away from bad deals. But that leaves behind a trail of abandoned units – a curse for society. Those who had walked into these houses for residential purposes are worst hit. They had thought that with real estate prices always rising, the unit could always be sold and the loan cleared. Nobody dreamt that real estate prices could fall.

In Nevada one out of every 54 houses got a foreclosure notice during the first quarter. It is an increase of 137% over the previous year. California ranked second with one out of 78 houses in the foreclosure trap. The increase over the previous year’s quarter was 213%. Among the top 10 other foreclosure offenders were Georgia, Michigan, Ohio, Massachusetts and Connecticut. The number of vacant houses grew to an all time record – 18.6 million. 2.9% of owner occupied houses were vacant – the third consecutive rise.

Apart from the sub-prime mortgages the other reasons for spiraling foreclosure are poor economic health of some of the regions as well as personal ones like illness, death and divorce together with un-employment.

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