Tennessee Q1 Foreclosures Up 147%

Memphis Business Journal ^ | 4/29/2006 | Staff Writers

[ex-Texan]

Were are in the midst of a "strong economy" say most people. The Foreclosure Nightmare is just beginning. [More reports here] Foreclosures add to local housing inventory and tend to apply downward pressure on prices. But the economic effects of mounting foreclosures is far more significant. I leave it for the experts to sort it all out. I have stated my opinions about risky loans before. The advent of 50 yr. mortgages will not solve the problem of hyper-inflated real estate. For all the naysayers out there, I repeat your favorite mantras: "Nothing to see here. Not in my neck of the woods. Time to move on."

[stainlessbanner]

bttt

[Mr. Brightside]

There was a record number of people late last year filing bankruptsy under the old law instead of the new, stricter law.

I wonder how many were due to that.

[ex-snook]

"Were are in the midst of a "strong economy" say most people. "

Economy is going great [for investors only] bump.

[ex-Texan]

Thanks for the Bump, sir. But watch the KEY WORD VANDALS strike again. Now the cowardly idiots are so pathetic they do not even bother to post a straight reply.

[dr_who_2]

If it spreads to my neck of the woods, I wouldn't mind to much. Don't want to pay for an overvalued home.

[Fawn]

The bubble is bursting down here in FL too....taking my neighbors MONTHS now to sell at a much lower price.

[308MBR]

Of course, there is no indication of a nationwide real estate bubble yet, but I'm sure the economists are on a sharp lookout for indications.

ROTFLMFAO!

Whether caused by overinflated house prices, ARMs that can really adjust, interest only mortgages, or home equity taken out to pay other debts which tend to mount rapidly again if habits don't change, this real estate ride is about over. I just spent two weeks around Sarasota FL, and March 2006 had a 70%+ drop in house sales volume (number of units, not total value) from March 2005. This is in an area with rapid turnover of real estate from all the Yankees moving down there to die. I'm sorry, but the chickens are beginning to wander back to the roost.

[Leisler]

So the overpriced houses are repoed. What do they, the banks, do with them? Melt them down and sell them overseas? Or do they sell them at more realistic prices to new homeowners who weren't such suckers in the first place?

If I understand the dynamics, people who were dolts, lose the house and go rent. Renters who were rational, stop renting and buy the house. OMG, the horror!

[308MBR]

Those more reasonable prices pop the bubble. The buyer's market is coming back.

[doc30]

Or do they sell them at more realistic prices to new homeowners who weren't such suckers in the first place?

One of the problems is that banks don't want to lose money. They will try to sell it to recoup what is owed on it. For an interst only loan, that'll be the original sale price.

[HighWheeler]

The BIG driver of forclosures is the quickly increasing interest rates folding over on ARMs - Adjustable Rate Mortgages.

A $700 per month 30 year ARM mortage at 3.65% payment 3-4 years ago can be far higher today, like $1000-1150 today, overflowing many mortage owner's ability to make the entire payment.

This is however a GREAT time to buy forclosed houses if you can fix them for a reasonable price and flip them in a hurry.

[Roccus]

Heard on the news this evening (Fox I believe) that 1 in every 300 odd homes is in foreclosure in Col.

[Flying Circus]

"One of the problems is that banks don't want to lose money."

When they get a swarm of foreclosures and a soft real estate market it may just be too late for that. Banks still cannot dictate the market price. They will have only two options: sell at a loss or hold on an manage the properties until the market comes back (which may be years). Since banks are generally not in the business of property management, I would expect many of the foreclosures on the interest only loans will get sold at a loss.

[ex-Texan]

From a recent news report:

RealtyTrac Inc., a California company that tracks the information, reported Monday that Colorado ranked No. 2 for foreclosures in the first quarter. Georgia was first.

Georgia had one of every 127 households in foreclosure in the first quarter, compared to Colorado's one of every 138.

RealtyTrac reported 13,267 properties fell into foreclosure in Colorado during the quarter. That's a jump of 104 percent from the fourth quarter and a 96 percent increase over the first quarter of 2005.

[Roccus]

Those numbers are even better. Perhaps I mis-heard. Too bad I'm happy where I am, the market is still going up here and will for a good while I suspect.

[stainlessbanner]

I wouldn't try to flip any houses in the current RE market. Perhaps in some markets one could get away with it, however, I think some folks getting stung now where the ones who thought flipping a house was easy and risk-free.

[Roccus]

Just for the sake of discussion. Col. seems like a nice place to live. Would most of these houses going into forclosure be middle or high end? And If I were looking to move and settle there, would now be good or do you think the buyers market will improve?

[HighWheeler]

Buying any house to flip has some risk, but these ARM swamped forclosure houses can go for only 80 percent of the market value, and the risk for flipping is not too bad.

[TXBSAFH]

Good my wife and I are going to be getting a new house in 2 years. I would love to get a repo that is sound but mayneed soem tlc at a rock bottom price.