Just finished up an interview with WXII 12. The topic was the fact that foreclosure numbers are up 23% since last month here in the Triad. No one is giving any concrete reason for the change but there are some issues to speculate on and that's where I come in.
1-ARMs may be adjusting. May, June and July are pretty busy months and typical months to close real estate in due to the weather, school is out and folks are trying to relocate and register kids in schools elsewhere. If someone purchased a home 3-5 years ago when the market was booming and ARMs were all the rage and everyone was banking on having their job AND making more money, NOW they are dealing with that ARM adjusting. This adjustment could just be enough to send someone into foreclosure especially if margins and ratios were thin to begin with when originally qualified.
2-Unemployment benefits may be running out. Anyone who lost a job within the past year is probably on the verge of losing their benefits. Without new jobs to be had this will put folks in a pickle, especially if they had cut their family budgets and were just eeaking by with these monies.
3-Reserves have ran out. Even responsible buyers who saved 6-8 months of liquid reserves are coming on those funds drying up. Whereas family budget cuts were made and funds were skimpy, they were making it by with a little subsidy from the family's "rainy day fund"--that same fund may now be all dried up.
Those are three possibilities and of course each situation varies greatly. Though the foreclosures may be up the market overall is CERTAINLY NOT DOWN. We have been swamped with folks wanting to purchase and first time buyers wanting to take advantage of tax credits, inventory and low rates.
As we speak I am still here at the office after writing and having two of three offers accepted. We are still waiting on word from the last one submitted.
If you have input on why these numbers are up or want to share your experience with the current real estate market, by all means, POST!
Brooke
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