Each week I receive a list of foreclosed properties in my market area. Not too long ago it was unusual to see more than fifty homes heading towards foreclosure.
Unfortunately Massachusetts is one of the highest areas for foreclosures; (Detroit ranks first in growth) Many homeowners are upside down, owing more than what their home is worth. Those homeowners who entered the market in 2005 have seen their equity erode through 2006. Mortgage companies with their unique financing programs, have put these individuals in a difficult situation. The desire to find loan programs which will fit the buyers needs almost seems to be non-ending. In my years of real estate, I have never seen so many loans be approved with no money down, 100% financial or money back at closing by the sellers. Its no wonder there are so many people on the verge of loosing their homes. Sub Prime loans ( Loan’s made to risky people) seem to be the bulk of issue. Over two-thirds of homes being foreclosed on are from individuals with sub-prime loans. Hardest hit are the area’s within the state where the working class of people resided.
The good news!! The market seems to heading the right direction for 2007. Home sales in the area are up, properties are selling faster and sellers seem to be willing to sell for less. The recent winter has certainly helped the local cause. Buyers are out looking, sellers are cooperating more and inventory levels has shrunk since the beginning of the year by approximately fifteen percent compared to last years numbers. Perhaps the downturn in the market is leveling off and the economy will begin to move forward. Some positive news was the just released unemployment number which showed Massachusetts at 4.4%. This number is much lower than economics forecasted, however revised numbers have yet to posted. Interest rates remain low, lower than last years overall numbers. National housing numbers released last week also show signs of growth, however the numbers may be seasonally adjusted due to the warmer weather and new home construction begins throughout the United Sates. With some positive news, I think we’ll begin to see home sales improve and foreclosed properties may continue to mount for the foreseeable future.
