Foreclosures Drop for Second Consecutive Month

Real Estate Agent with The Mills Team
Instead of increasing foreclosures, the latest trend seems to show that foreclosures have fallen for the second consecutive month. The numbers indicate that foreclosures have not fallen to this level since the second month of 2007 and it appears that the trend will continue. Foreclosure filings were down over ten percent from Aug '08 and down a bit less than seven percent from Sept '08.

Homes that had been taken over by lenders, in October, were dramatically down at nearly twenty-five percent from the previous month. The numbers also indicate that foreclosures, in the United States, have not been this low in five months.

What does this mean for the housing market? Real estate experts agree that the drop in foreclosures suggests that we are beginning to see the intitial signs of a housing market on the rebound. More foreclosures are going to take place, but until the market is able to absorb the excess of homes, it will not be able to recover. In addition, the drop is also due to banks and lenders taking efforts to prevent the home for going into forelosure in the first place.

Another factor to keep in mind is the fact that foreclosures are concentrated to certain regions of the United States. Coastal areas like California have been hit hard because of the unrealistic price increases of the past. While some areas are being inundated with foreclosures due to growing unemployment rates and misguided sub-prime loans.

Areas in California that have been hit the hardest are Riverside, Sacramento, San Bernardino, Riverside and some areas in San Diego. The La Jolla real estate market has not been one of the counties in San Diego hit the hardest by foreclosures, but some have benefited from the drop in average prices in La Jolla and have even been able to find La Jolla condos priced at under $200,000 in some cases. While a home in La Jolla being sold for under a million dollars was once a rare sight, now you can usually find several on the market.

Nearly twenty-five out of one thousand households have had to deal with pre-foreclosure notices, while more than ten out of one thousand households have actually had their home or condo repossessed. In both cases, the numbers are up more than seventy percent from the previous year. So, don't think we are out of the woods just yet.

Barack Obama has said that he will put a three month freeze on foreclosures once he takes office. However, the task may not so easy, as individual states have their own form of regulation when it comes to foreclosure. In addition, there will be a new stimulus package which is expected to have better tax credits for first time buyers. The last tax credit, put into effect by the Bush administration has done little to boost the ailing housing market.

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Ruth Mills

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