Michigan Battered By Foreclosures

Posted in Foreclosure Homes, July 8th, 2008 |

Michigan has been especially badly battered by foreclosures, according to Mortgage Bankers Association. Across the country about 2 million houses were in foreclosure during the first three months of the current year, 2008. Foreclosure of houses increased from 42% to 54% nationally. Michigan has been one of the worst hit pockets. In January there were 11,554 foreclosures in Michigan. It calculated to a foreclosure rate of 1:366 in the whole state.

Dennis Nabors based in Keller Williams is a realtor having 25 years of experience. He comments that one of the main reasons for this foreclosure crisis is that many bought houses without making any down payment or “place no equity in the property”. Soon after followed the economic slump in Michigan. This caused many to lose either one or both their houses. With the houses having no equity they could not approach the banks for loan refinancing and modification to tide over the crisis. Foreclosures became inevitable.

The month of January saw Wayne County reporting a foreclosure rate of 1:124. In the Detroit region more than half the houses listed in the real estate market are coming from the foreclosure zone. The affluent localities of Macomb and Oakland too have not been spared. Here the foreclosure numbers increased by 108% in Macomb and 338% in Oakland. The market is far from hot. It is a buyer’s paradise. This is the opportune time to purchase and move into a better home in an upgraded locality. Recently one family bought a house to move into an area having better schools. Till now they did not have the chance to move into a house bigger than the one they were occupying. But the opportunity came with the seller paying all the closing costs. Finally they found themselves with a house loan with an interest of 5.75%. They sold their previous house for $210,00 and bought the new one for $212,000. The happy owners let out the word that this is the time for renters to move into houses of their own.

Nabors keenly watches the statistics. His reading is that the end is nowhere near in sight. Only when the foreclosure numbers show sign of decline can it be said with confidence that the market is turning. But there are no signs of it as yet. More foreclosed houses rushing into the real estate means supply continues to outpace demand. In fact it keeps on increasing leading to disastrous consequences for the seller.