Foreclosure Crisis: Is Your City Getting Away? – I

The Real estate condition in the country is really alarming, especially when it is judged from the angle of “hangover of unsold homes”. The situation is expected to worsen if the economy gives way further. The mortgage meltdown and rise in the number of foreclosures will be the immediate results. This is the current overall situation of the country as a whole. However, the local real estate market is expected to be different and more localized. It would not be same across the country. Even in this market, the rate of single-family homes in most of the metro areas has increased than last year.

At the time of the housing boom, different cities took off at different times. Las Vegas (Nevada) and San Diego (California) were the beginners. Similarly, during this down-stream, cities may act the same way as they did earlier. Considering and following some key factors could help you predict the situation of your city, whether it is near recovery or not.

Tracking the job market condition you can get an idea of the local economic situation. If there are more job vacancies, then you could expect a turnaround in the real estate market and vice versa.

Due to the high rate of foreclosures, there are too many homes in the market. However the number of buyers is getting fewer. If the situation becomes reverse, then a turnaround is expected in the near future. For common people, it is not possible to track housing records. Only people attached to the housing market can do it. To get an idea, ask them some questions like:

1. monthly inventory of houses in your locality
2. total number of houses subject to foreclosure and thus for sale
3. average tenure of a home staying on the market

If monthly inventory is more or less six months, and average tenure is slightly more than 90 days, then a recovery is expected soon.

However, since the local real estate market is unpredictable, you may want to judge it on monthly basis. To get an idea, consider a year to year record of development in sales. Track the number of houses sold this month vs. the same month last year.

Another important criterion is housing stocks levels. Check whether it is returning to the same level as it was during the real estate boom or not. Don’t forget to track the foreclosure figures too.

Discussing and considering the above may help you predict a housing rebound in your city. However, there are lot more factors to keep in mind.

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