What's the rate of foreclosure on homes now? In this area there are many houses going into foreclosures for several reasons, many homes in the central neighborhoods have been sitting vacant for a number of years --- no renters or buyers living in them and they seem to be decaying very rapidly by sitting empty. A home that forecloses often looses 50% of it's "value", a home that forecloses in a dead or dying neighborhood with many vacancies maybe loose most of it's "value".
Also how much "wealth" being invested in these homes if from government subsidized mortgages and rent? We're seeing 20 year old single mothers buying houses with a lot of government help --- how well are they going to maintain these houses, how well will the value stay?
Thank you for making this point. I don't have #s in front of me, but Wall Street Journal has written about this several times and apparently foreclosure rates *are* up.
The typical pattern is this: couple buys a lot of house at a high price; so high that they both need to be working full-time professional jobs to make the mortgage payments. One loses their job & they take out a home equity loan. The other loses their job and they start getting behind in the payments. One or more gets new job at lower wage rate, and still have trouble making the payments. So eventually they foreclose.
Many of these houses were bought at the peak of the "dot boom," when everyone thought that the good times were going to keep rolling on forever, and when real estate prices had gone up exponentially (i.e. they bought high.)