Economic Tsunami Predicted in Mc Henry County
Posted in Foreclosed Homes, September 18th, 2009
Its bad news for those predicting an end to the slump-down of the foreclosures that had taken the sheen off most major industries, including real estate. Mc Henry County is poised to take an economic beating according to experts like Paul Hespen who is a broker with Prudential First Realty.-according to him job losses are at the root of the problem, more than the Sub-prime Crisis that had really snowballed into an economic slowdown the world over.
The problem of foreclosures reared its ugly head once again this year and it has already outdone itself than last year according to findings from the Mc Henry County Circuit Clerk. In April and May, the government took initiatives to manage the Foreclosure problem, but the government’s stance was short sighted as people who had taken housing loans with modified schemes are also facing the brunt of it. Official records put the foreclosure figure at 1600+ this year compared to about 1436 in 2008.
As any economist would tell you that a rise in foreclosures is bound to affect housing prices, Mc Henry County too was not an exception. The standard price of a house in Mc Henry County has nosedived by 16% i.e. from $206,741 to $245,671 in just a year
Hespen reckons that the market is poised to go down even further and the worst part is that he does not know where it could end. Approx 1,175 homes faced foreclosure sales during the middle of 2007 in McHenry County. However, this figure declined to 706 within the mid of 2009 according to Hespen’s observations.
A major chunk of the property market comprises of foreclosed homes all over the county assumes Rick O’Connor, who is the broker including the owner of Realty Executives Cornerstone. O’Connor assumes that, “A lot of foreclosures aren’t even on the market yet. We’re going to be dealing with foreclosures for the next four or five years.”
First-time buyers and investors are attracted to lesser prices and low rates of interest. Kurt Clements, being the senior vice president of GSF Mortgage and Home Buyers Realty as well as one of the leading investors observes that, “We’re only buying foreclosures,” he said. “It’s the cheapest home out there.”
According to O’Connor’s calculations approx 65% of the sales were made to the first time buyers. Moreover, these buyers also reaped the benefits of a lump sum tax credit of $8,000. Buying foreclosed properties has been simplified by the availability of the 203(k) loans. However the sellers and the dealers might also suffer from loses and hence Hespen comments that, “Real estate is always a cocktail party discussion, but now it’s more personal.”
