I have an upper bracket listing in Northern Brooklyn Park that will be closing at the end of the month. The other day after I was checking the home, I drove through the neighborhood and counted the homes that were going into Foreclosure. I came up with five properties within a half a mile that were either Pre-Foreclosure or Bank Owned. This is a 400k plus area of newer constructed homes. Whenever you think of foreclosure you think of boarded up homes in substandard neighborhoods. Wrong! Welcome the American Nightmare! The American Dream was to own a 4 bedroom up McMansion in the suburbs. What happen was the American Consumer bite off more than they could chew as the Mortgage Bankers and Realtors of less ethical persuasion played cheerleader and encouraged them to 1. Buy more house than they coulds afford 2. Did not educate the Buyer about the likelihood of an eventual Real Estate slowdown. Now everyone will be hurt by this lack of ethical practice and responsibility.
According to the Minneapolis Startribune Brooklyn Park has 492 homes in foreclosure. I believe that many suburbs lioke Brooklyn Park will be heavily affected by the Sub-prime disaster. It may take years for home prices to stabilize and recover from the current market. A underwriting requirement stiffen and ARMs come due the forclosure rates in these communities will accelerate. It could take years to get rid of the inventory. Upper Bracket Forclosures will affect the New Construction market. In the entry level homes, many properties are horrific condition. I have read in MLS comments that agents and buyers should wear masks in somecases!
How are we going to solve this problem? Here is a few ideas I have:
1. The Banks and Investors will need tro renegociate the interest rates on these loans. It would better to keep people in their homes than oversupply the housing inventory REO properties.
2. For homes that are in sub-par condition, The local, state, and federal governments must provide grants, special financing, and incentives for first time buyers and investors purchase, and rehab these properties.
3. Realtors must take a more proactive role helping their clients maintain their financial health. Face it some people should not own property. Flooding the market with unqualified and irresponsible consumers is not good for our profession in the long run.
4. Loan Officer should be Licenced and required to take ethics, agency and other forms of continuing education.
These are just a few thoughts.
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