Foreclosure Difficulties in the US
Posted on February 9, 2009
Filed Under Foreclosures | Leave a Comment
Economy.com made an analysis, which shows that foreclosures prices in Miami are almost 22 times thicker than the yearly rents. In the last 20 years, the medium rate used to be of about 15 yearly rents. This difference means that a house with an estimated worth of 500,000 dollars (372,000 Euros) would value at present only 341,000 dollars (254,000 Euros), in conformity with a mutually dependence between rents on the one hand and prices on the other.
The priorities of possible clients are furnished with a worthy perspective by this report. Given that, a bigger growth of the indicator was noticed in the U.S. extremities and a smaller one in the centre of the country. In most regions, the difference is strongly marked. However, there are areas like Riverside, California and Sacramento, Dallas where the difference has not reached yet abnormal limits. Brian Bethune, working as economist at Global Insight said that we often play with fire. A hardworking estate agent, Colleen Pestana from Orange, California, declares that most of the people in Southern California who lost their houses due to foreclosure, have actually worked in the sector of real estate or in mortgage companies.
The majority of them have moved on regular basis into bigger houses, trusting in the real, unchangeable industry. The consequence was that through foreclosure these people lost their properties. It seems that in the U.S., the period of resale profits have gone by. At present, the buyers who want to sell in no more time than a year frequently lose. Consequently, speculators, average homeowners and those with prescribed mortgages are affected by this situation.
At present, the mortgage taken alone values more than most of the foreclosures purchased with money from public institutions. In conformity with what Forbes said, in America, one building of three is threaten by foreclosure or by being taken away by banks. In California, Florida and Nevada are the larger number of prescribed mortgages. In these states, 1.5 million properties have been taken away by banks.
In the U.S., the real condition of the market is in rapid decline. The owners whose homes were foreclosed cannot get back even the sums they paid to buy the estates. Las Vegas, Los Angeles, California, Sacramento are the utmost affected by the crisis generated by foreclosures. In these states, more than 20% of the houses that were put on sale were bought less than a year before and the majority of the transactions have been closed at prices smaller than the original ones.
Similar situations are found in Detroit, Phoenix, and San Francisco. Taking into consideration what Forbes said, one of three houses in the U.S. is about to be foreclosed, and almost one of four houses is sold by the owners who refuse to pay mortgages.
Between April and June 2008, 43, 8% of the properties were sold with less money than they were bought in Memphis, Tennessee. However, in Detroit the situation was even worse with more than 56% of the houses sold at a lower cost than the purchasing price. The states where prices have not recorded a great growth in the past 5 years have utmost suffered from foreclosures.
During 2002 and 2006, in Phoenix and Atlanta, properties were greatly valued. Presently, on these two markets, the resale loss reached a dead end. The foreclosure analysts interpret these cases as positive aspects.