Thu 16 Nov 2006
Real estate is big business, but there are changes afoot and they should concern all of us:
According to a press release from RealtyTrac , foreclosures are up 65% over this time last year.
I've made some calls to realtors I know and they have confirmed how serious a problem it is… and suggested this reason:
Incredibly low "teaser rates" offered a couple years ago are now ending and the regular rates are kicking in. That means that housing expenses for many people are now increasing — and in many cases, those expenses are increasing much higher than expected.
As a result, foreclosures are on the rise. I don't pretend to know a lot about the economy or the real estate market but I can't imagine that a huge increase in foreclosures can be good for anyone: many homeowners now have to sell at a loss to avoid foreclosure and will be forced to either rent or buy a smaller home. Those who enter foreclosure run the risk of serious repercussions on their credit report. And a flood of new homes on the market will drive housing prices down… but who is out there to buy?