What's the Big Deal With Foreclosures

What is the big deal with foreclosures and why is the real estate market taking such a hit. Did you know per the Census Bureau there is almost 128 million housing units in the us. Per REALTYTRAC.COM, about 1.3 households received foreclosure notice during 2007. That mean the less then 2 percent of the entire housing market received a foreclosure notice.

The problem is that not a lot of the 128 million have there homes up for sale, and out of all the home sales last year 23 percent of them where foreclosure. Not to many owner occupants want to buy a foreclosure because most of the time the house need a lot of repairs done, and most owner occupants can't afford to buy a house and cost of repairs. Which mean the people buying up these foreclosures are investor who flip or make them into rental properties. Why are people not selling there homes? Home values have depreciated due to the amount of foreclosure up for sale. If you house was worth 120K last year, but a bank has a foreclosure up for sale on your same street for 80K when the realtors or the bank run comps that will bring your property value down.
      Why do people get foreclosed on? You have the 3 D's (death, devoices, and disease), but I think ARM (adjustable rate mortgages) have a large part to do with it as well. When your payment goes from 1500.00 to 2200.00 after your 2 year fixed rate is up it is hard to maintain your payments. When you took the loan the bank advised you that after 2 years you can refinance, but do to your property is not worth as much as it was when you bought the house you are unable to get refinance.
      Bottom line is now is a great time for investor to buy up property! It is a great rental market, and you can still flip houses if you know what you are doing.

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