Bay Area Sees Drastic Increase in Foreclosure Homes, Experts Prepare for the Worst
23 January 2008Following the national trend in the rising rate of foreclosure homes, the East Bay region of the San Francisco bay area in California saw a 120% climb in the amount of foreclosure homes on the market in the fourth quarter of 2007. Numbers of foreclosure homes on the market are now at record highs in many parts of the Bay Area, and with more foreclosure activity expected in 2008, many are worried.
The San Francisco bay area managed to hold out against the foreclosure crisis for much longer than other urban areas. After the real estate boom and heavy investment at the early part of the millennium, home values in the area were soaring. The bay area has always been a very desirable location for homeowners, so encouraging demand and sales is not as much of a problem in the area as it is in other cities, which probably account for why the foreclosure homes inventory didn’t jump as fast as in other cities.
But now it seems the bay area has caught up with the rest of the country. Many signs pointed to the sudden surge in foreclosure homes, including the continued depreciation of home values over 2007. And when viewed over the course of a year from December 2006 to December 2007, the inventory of foreclosure homes in the bay area rose over 450%.
San Francisco is one of the most expensive cities with the highest home values in the nation, so the fact that it too is now suffering in the same sever way as other cities is a major sign to experts and legislators. Their concern was illustrated on Tuesday, then the Federal Reserve imposed a major cut on the nationwide interest rate. Many of the foreclosures have been attributed to the presence of adjustable rate mortgages, which can cause a monthly mortgage payment to vary from month to month. Cutting the rate is an attempt to allow homeowners a chance to catch up, but its effectiveness will not be able to be recorded for several months. Economists tend to believe that the real estate market is a sign of the overall health of the economy, and with so many foreclosure homes now coming on to the market in affluent areas, many are worried that the country may be on the brink of recession.
The country is now flooded with foreclosure homes, and with many more mortgages set to go into periods of adjustment in 2008, it seems that this is not yet the end. However, the recent trend in foreclosure homes has led many homebuyers to consider investing in foreclosure homes as a means of winning properties for cheap prices. Since banks, government lending agencies and private lenders are so burdened with foreclosure home at this point, many of them are being sold for way below their already depreciated market values, paving the way for huge savings. Investing in foreclosure homes in areas like the San Francisco bay area could turn out to be very lucrative, since die to their desirability, they will be some of the first to rebound when the crisis ends.
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on March 2nd, 2008 at 9:12 pm
[...] Foreclosures are a huge opportunity right now. I just read that “December 2006 to December 2007, the inventory of foreclosure homes in the bay area rose over 450%” this was posted on an article located at http://www.foreclosure-support.com/wp/article-012340.html the full article can be read there. In August I read that “Nationally, foreclosure filings more than doubled since last August, with 243,947 households in some stage of the foreclosure process in August, versus 113,300 a year ago, as posted on RealtyTrac the Chronicle . That is a 36% jump from 179,599 of those filing in July. [...]