Foreclosure Tsunami #2 is coming

If you haven't been paying attention to the foreclosure rates and subprime lending down fall then you must be living in a cave. Over the last year or so there have been a substantial increase in home foreclosure around the country. People are losing their homes left and right due to subprime lending and individual spending habits. Just recently a report was released to the general public that stated there is going to be 40 billion dollars worth of subprime loans that are getting ready to go through their fist adjusting period starting in August 07. What does all this mean you might be asking yourself, well let me explain a little about what is going to happen in the next year and near future.


Well lets start with how much per month is going to adjust according to the numbers released in the report i am speaking about. If you have 40 billion dollars that is suppose to adjust starting in August this means that roughly 3 billion dollars worth of subprime loans a month for the next year will adjust. These numbers are unheard of through out the history of Real Estate. Lets assume that every property that was bought with that 40 billion dollars worth of subprime loans was to purchase an average priced home. I will use the price of a median home in Las Vegas as an example which is $270,000. If you divide 270k into 3 billion you'll get 11,111. By watching what has happened in previous months across the nation with subprime loans and foreclosure what do you think is about to happen in the next year? What i think is going to happen is that we are going to see a huge spike in foreclosed homes and a huge gains for foreclosure investors. It is defiantly going to remain a buyers market for at least the next year due to all this chaos. If you are currently in a subprime loan you should seriously consider refinancing to a fixed rate unless you can afford to keep your home or property when it comes time for your loan to adjust. Also be prepared to have the resale market get flooded with pre foreclosure homes that have to sell above the median price just to break even. This will have an effect on regular people just trying to sell their homes because in order to compete with this kind of market behavior one is forced to undercut just to get their property sold. If you are considering selling and don't have a time table in which you have to sell then i suggest you wait until next year to see what is happening. Agents, Realtors, New home buyers, Home sellers and any one else reading this post should really pay attention to their markets before making any decisions about what they should do.