Friday, August 25, 2006

The good news with foreclosures?

I'm sure everyone has heard the hoopla about adjustable rate mortgages (ARMs) resetting and the anticipation that there could be a substantial increase in foreclosures in coming years. Over the past few years ARMs have become increasingly popular with their attractive initially lower rates and their ability to allow buyers to buy more house. Especially in areas like California where home prices were increasing at exponential rates, sometimes it was the only way people could buy the home they wanted. Whether this was wise or not is a whole different story. Like most other things in real estate, foreclosures will not affect the country uniformly. Not only do foreclosure laws vary from state to state, but local factors including unemployment come into play. But the news is not all bad. According to an article written by Charles DuBow in Business Week magazine, "a new study by RealtyTrac, which publishes the nation's largest database of pre-foreclosure and foreclosure properties, the situation is not all that bad. In their survey of foreclosure rates in the 100 largest metropolitan statistical areas (MSAs) in the U.S., the second quarter of 2006 actually saw fewer foreclosures than in the first quarter. While Indianapolis, Atlanta and Dallas saw the nation's three highest metropolitan foreclosure rates, other areas, such as Chicago and Portland, Ore., saw a 60% and 188% decline, respectively, from the first quarter." I can't predict the future, but as I see it, it's a good start.