A Resurge in Cape Foreclosures

The number of foreclosures in Cape has again surpassed nearly every other places of the state. The reason behind this, as real estate experts have put it is that, this region has got a good number of second homes and also it depends greatly on the seasonal tourist industry. Economist Paul Willen has said that when a property is not the primary residence of the owner, then the result of being a defaulter is not that severe for the defaulter. In his own words, “Because you don’t live there, the consequences of defaulting are much less severe. If it’s a summer home, then you just don’t go away this summer, but you don’t end up on the street.”

According to Kevin Cuff, executive director, Massachusetts Mortgage Bankers Association, the real estate speculation is likely to increase the number of Cape foreclosures. He opines that that the speculators just like the second homeowners have lesser chance to combat when an instance of financial problem takes place. In all likelihood, in such a situation, the owner will part with the property. The number of foreclosures in Cape has almost doubled in the first three quarters of 2008 in comparison to the figure a year back. A sharp increase in the number of foreclosures is visible in the Dukes County. Here, the number of foreclosures has increased by 260 percent. Most exorbitant growth in the rate of foreclosure has been arrested in the Barnstable County.

The total number of foreclosure deeds that has been filed statewide at the close of September has increased by 71.8 percent when compared to the figure of last year during the same period. The off-season unemployment is going to further increase the number of foreclosures in Cape. The rate of unemployment in Cape in 2007 was 4.8 percent. This figure was somewhat close to the unemployment rate of the state that stood at 4.5 percent. The rate of unemployment during winter went up by 7.4 percent. According to Kevin Park, a researcher at Harvard University, the pace at which the value of homes have gone down in a particular place can also badly affect the number of foreclosures in that region.

As the prices of property have gone down, the homeowners are finding it very difficult to find out buyers for their home. Besides, they also cannot refinance into affordable loans. The price of home have decreased maximum in the Barnstable County. In Cape, the median sales price of a single-family home has gone down by 12.3 percent when compared to the figure a year ago.

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