Third Foreclosure Wave Hits Areas Of Stability…
November 3rd, 2009 Categories: National Real Estate Trends, Pre Foreclosures
A report from RealtyTrac says dramatic increases in foreclosures in Q3 ‘09 came in suburban areas previously believed to be stable, such as Boise, Idaho, up nearly 22% from Q209, and Provo, Utah, which rose nearly 11% in the same period. In several states, foreclosure activities drifted toward smaller towns with previously self-sustaining industries. Chico, California in Sacramento Valley, an agricultural hub, had a 98% increase in foreclosures from Q3 ‘08, according to the report. “You’re moving from Phoenix to Prescott, you’re moving from Las Vegas to Reno,” said Rick Sharga, the vice president of marketing at RealtyTrac.
Sharga sees the foreclosure crisis coming in three waves, and with this new data, the market is showing signs of the second one. “That first wave of foreclosures cratered the economy, which created job losses, which created the second wave. Now, we’re seeing prime rate loans affected by unemployment. And the third wave will be really a repeat of wave one, except this time we’re going to see a switch of Option ARM and Alt-A loans out for the subprime loans. It will probably be as big but somewhat shorter lived.” Sharga said that he expects a peak in foreclosures in 2010, only a marginal improvement in 2011 and a return to normal monthly foreclosure activity sometime in 2012.
Courtesy Chris McLaughlin
