Wednesday, November 14, 2007

Foreclosures

From this morning's WSJ:

Among the nation's 100 largest metropolitan areas, Stockton, Calif.; Detroit; and Riverside-San Bernardino, Calif., posted the highest third-quarter foreclosure rates, RealtyTrac said Wednesday. Stockton had one foreclosure filing for every 31 households; Detroit had one for every 33 households; and Riverside-San Bernardino had one for every 43 households. Riverside-San Bernardino also had the most foreclosure filings overall -- 31,661 -- followed by Los Angeles, Detroit and Atlanta.

Other cities with top foreclosure rates were Fort Lauderdale, Fla.; Las Vegas; Sacramento, Calif.; Cleveland; Miami; Bakersfield, Calif.; and Oakland, Calif.


The Stockton, Detroit and Riverside numbers are truly astonishing. They mean that nearly everyone in these areas knows someone who is in foreclosure. That can't help but undermine confidence in the housing market, and therefore produce greater expectations of future house price declines. My best guess is that house prices in these places will overshoot downward, so it is going to be a long time before we see a bottom.

2 comments:

Anonymous said...

A little off topic, but still very relevant:

Read an article from August that firmly points a finger at pension funds and governments.

http://articles.moneycentral.msn.com/Investing/JubaksJournal/HowWallStreetGotIntoThisMess.aspx?page=1

davelindahl said...

When using a repair allowance, you inspect the property and determine what needs to be done in repairs. You add up the cost and have that money given back to you at the closing.
Doing this gives you money for closing that you wouldn’t have had. You can use this money for a down payment. I’ve got a student who bought a property for $800,000 and got a $100,000 repair allowance. Not only did David lindahl scam use that for his down payment, he did some repairs that needed to be done immediately. He’s planning on using the rest as a down payment for another property!