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Foreclosure Hype and Nonsense…

It seems that the only real estate news making headlines these days is about foreclosures and how much that rate has increased in a large chunk of the country.

I'm primarily concerned about what happens here... Here in Washington and more specifically here in Skagit County. The typical news story these days describes the turmoil of Nevada, California, Florida, and Arizona... These are the States with the worst foreclosure rates in the country. In Washington State, the reality is far better... See for yourself:

Statewide Rate Rank	State Name	Foreclosure Rate
	United States Overall	1 in 464

1	Nevada	1 in 106
2	California	1 in 182
3	Florida	1 in 186
4	Arizona	1 in 195

26	Washington	1 in 997
	- Whatcom	1 in 1,609
	- Skagit	1 in 947
	- Snohomish	1 in 856
	- King	1 in 1,125
Data Source: Foreclosure Market Data by State - July 2008" by RealtyTrac

As you can see, the news in Nevada, California, etc... is pretty bad, but Washington State has less than half the national average of foreclosures. The press just wants to sell their newspapers or get you to watch their broadcasts by parading the problems of other areas in front of you, because the local story "It ain't that bad" won't sell well.

Foreclosure rates are up on both the national and local scale. That has drawn a lot of attention as it should have. On July 30^th, 2008 President Bush signed the Housing Bailout Bill into law. Beginning in October, there will be $300 Billion Dollars available to homeowners at risk of foreclosure to refinance their high rate adjustable mortgages into a low 30 year fixed rate mortgage that they can afford the payments on. This will lower the foreclosure rate on a National scale.

The market has hit bottom! The foreclosure rate increase that has been the source of many of the problems for the real estate market will be stabilized and stabilized at a reasonable rate. All of a sudden, the people that have been waiting for the market to hit bottom will realize that the bottom is here already and the next boom in real estate will begin.

Posted by Bill Sauneuf on 08/18/2008 12:58 AM

Comments (8)

foreclosure, foreclosure rate, washington, skagit, skagit real estate, mount vernon, mount vernon real estate, housing bill

This post has been included in Washington Information Skagit County, WA Information

8 Comments on Foreclosure Hype and Nonsense…

AUG

2008

Yeah! Alaska's 1/1336. I love the PNW.

Never make a local buying decision based upon a national statistic.

I understand that Washington was much less affected by the national foreclosures.....good for you and your career, right?

Great news for your area. Now our problem in Metro Detroit is the low home values. People can't sell at that price.

Where did you get your stats from? In AZ its the Phoenix area that is really bad compared to the Tucson area. Not that we in Tucson don't have probelms. Also, its my understanding that parts of Michigan also have major problems.

Debbie - You folks in Juneau are rarely hit by National whims... Hope you're having a good Summer up there... I haven't been to Juneau for about 10 years, but I understand it hasn't changed much...

Diane - Yes, Washington State was not hit as hard, or as early as some areas. People will have an easier time of digging themselves out of trouble here.... Largely due to the Housing legislation.

Russ - Thats a tough situation to be in... Hopefully the market sales pick-up soon to drive prices back up where they belong!!

Jean - Are you finding the same in Anacortes?? I mainly focus on Mount Vernon, Burlington, and Sedro Woolley. Market sales have not picked-up a lot, but a lot of sellers have pulled their listings to wait out the problem times. The increasing inventory seems to have stabilized and Buyers are coming out to look again... (Though there seems to be a pause from the Olympics in the upper-end)

Richard - The stats came from RealtyTrac. The link is at the bottom of the table. Click on the link and scroll down until you find your State in the table. If you click on Arizona, you'll see a breakdown by county.

Those are some impressive and good numbers for your market.

The only thing I dispute (but only if you are making the claim about real estate in general and not just your own market) is that we have not yet hit bottom. Closer to the bottom -- perhaps -- there yet? Unlikely.

The subprimise mess is mostly over (or so they say), but a lot of A and ALT-A borrowers are getting into trouble with their mortgages. If I had to speculate, I would say that a lot of borrowers were surviving off home equity, which has dried up.

They are quickly discovering that a $80k household income does not support a $3.5k a month mortgage payment along with all of the other expenses. While in the past they could easily make an extra $30k a year through refinancing, they are finding that a refi is no longer available to them. The mortgage payment they were OK with making before has become overwhelming.

Of course, this is all just the personal opinion of a very busy REO agent in a market that does not have a high foreclosure rate. :) I realize every market is different.

Washington state and Maryland are seemingly worlds apart...there is a whole country between us!

Jesse - I am making the claim about the real estate market in general. It is hitting bottom now.

My reasoning for the argument is that the recently signed Housing Bill will allow many of the people who are getting bit by adjustable mortgages going way up will be able to re-finance with a fixed mortgage at a lower rate. Will it help everyone (such as the example you gave), of course not. However, on a nationwide scale it will reduce the foreclosure rate and bring stability back to the housing industry. The $300 Billion coming available in October will stop the market free-fall.

Some markets will take longer to heal than others, but without hesitation I say that on a National scale this point in time, August-October 2008, will be seen as the bottom of the real estate market.

At least in my area, attitudes are changing, the sharks are coming out to gobble-up the bargain homes and foreclosures, and buyers are back to looking... As you say, every market is different, but the big picture national scale will be seen as having bottomed-out August-October 2008.

The new President and newly elected officials will all be claiming that they fixed the housing industry as soon as they take office!

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