Friday, September 07, 2007
Record Number of Gwinnett Foreclosures
The Gwinnett Daily Posts reports that September set a new high for the number of houses foreclosed. There were 752 foreclosures in September. And unfortunately, the number is likely to increase still more as Adjustable Rate Mortgages (ARMs) continue to reset to higher interest rates over the next six months. The number of outstanding ARMs only begins to decrease after the spring of 2008.
The large number of foreclosures affects the entire housing market. Those who lose their homes to foreclosure are locked out of the home buying market until they can reestablish their credit. This reduces the total number of buyers as well as slows down the normal upward mobility of the average buyer. This slows down the entire cycle of people moving from smaller to larger houses. Fewer buyers leads to a "buyer's market" putting downward pressure on prices. The houses foreclosed typically sell for less than other homes on the market adding still more pressure on prices.
Relief is still months if not years away as the market must absorb all the foreclosed homes, and it will take time for the foreclosed buyers to reenter the market.
The large number of foreclosures affects the entire housing market. Those who lose their homes to foreclosure are locked out of the home buying market until they can reestablish their credit. This reduces the total number of buyers as well as slows down the normal upward mobility of the average buyer. This slows down the entire cycle of people moving from smaller to larger houses. Fewer buyers leads to a "buyer's market" putting downward pressure on prices. The houses foreclosed typically sell for less than other homes on the market adding still more pressure on prices.
Relief is still months if not years away as the market must absorb all the foreclosed homes, and it will take time for the foreclosed buyers to reenter the market.
# posted by Bob @ 4:17 AM 
