Foreclosure Crisis More Local Than National

Posted in Foreclosure, February 25th, 2008 |

The recent figures released by RealtyTrac making in depth studies of 100 areas worse affected by foreclosures has detailed numbers in cities, percentage of houses being foreclosed upon and the percentage changes from the previous year. The figures continue to cause concern but it seems that the crisis is more localized than general. However it will not take long for the foreclosure fire to spread. Right now it will dampen the spirits of those who are continuously presenting a gloomy picture of impending doom.

The national rate of foreclosures has risen by 79% since 2006 – undoubtedly a big increase. In the previous year it was 1.033% . It will be well to note that 30% of all the houses are free from mortgage and therefore only 7/10th of 1% houses are inside the foreclosure zone.

In the housing market amongst the top 100 the foreclosure rate was 1.38% - a rise of 78% in comparison to the previous year. If the top 100 were to be ranked then it will be seen that 34 had foreclosure rates more than the average. 51 regions had rates of 1% or even less. The rates of 14 among the group of 100 had actually fallen. The regions suffering from high foreclosures are comparatively very small. For instance Bethesda saw foreclosures rise by 1,288% against 0.682%. This means that in 2005 foreclosures were virtually non existent there. Today also it is well below the national average. The same applies to Albany – rise of 638% against 0.25%, Baltimore – rise of 544% against 0.73% and
Providence rise of 354% against 0.41%. Figures also show that the top ten foreclosure zones in the country are places where prices fluctuate to extreme levels – changes that are far from the national average of 46.2% during the past five years. Seven of the group of top ten saw major price rise in real estate during the past five years. Three saw increases much lower than the national median. This pattern is consistent in the top 25 foreclosed zones. The seven averaged a remarkable 91.6% rise – double that of the average of the country. In its turn the national average was triple the inflation rate of this period.

It is little wonder then that the foreclosure rates are zooming figures. Anybody who bought within the past few years with a 5% or 10% down payment has a good chance of turning upside down as the bubble bursts.