Foreclosures Beat Home Sales In Many Parts Of The Country

March 19th, 2008

Foreclosure notices being sent out at a rapid pace, in many places, has exceeded the number of homes sold in the particular month. The rate of foreclosures in Nevada is the worst hit with the highest across the nation. With the housing markets being hit continuously with falling prices and distress sales, worried government officials and voluntary service organizations are trying to bring about legislative proposals and other plans to delay foreclosures so that the homeowners can have some time to arrange for the payments. However, with no consensus yet with the legislative proposals, the foreclosures are still mounting.

With over 153,745 initial notices being sent out for foreclosure proceedings in January alone (as reported by RealtyTrac), even sales of 43,000 newly built single-family homes means nothing. This figure of initial notices amounts to more than half of the total home sales made. Moving West, the situation only worsens with the home sales being barely higher than the number of issued notices. It looks like the worst hit areas are behind in the home sales as compared to the notices issued.

Foreclosures in California topped the list with the highest number of foreclosure filings, however was ranked fourth on the number of houses affected by the foreclosure proceedings as many homeowners tried to make payments or sell their homes to clear off the loans. Nevada topped this set, with Michigan foreclosure homes being a close follower.

Foreclosed homes represent displaced homeowners on one hand but increase the number of homes available for sale on the other. This in effect creates competition to other sellers like those trying to sell newly built homes. Moreover, since the foreclosed homes fetch lower prices when the sale happens, they bring down the prices even for the newly built homes. As reported by the Census Bureau, the number of newly built homes lying vacant as of December last year was 197,000 and came down only to 195,000 homes in January.

It seems that the areas which grew rapidly with the housing boom are the areas worst affected by the mortgage crisis. States like South Dakota, Vermont, Maine, North Dakota and West Virginia were among those largely unaffected by the housing boom and today these states boast of having sound economies when the rest of the nation is under the foreclosure storm. Foreclosure rates reported in these states is well below 0.1 percent!