Real Estate Foreclosures Topping Great Depression
November 27, 2007 (PRLEAP.COM) Business NewsHome foreclosures will worsen reaching new record highs in 2008 as a result of the credit crunch, topping the Great Depression, according to a new report by Housing Predictor, which forecasts housing markets in more than 250 local markets in all 50 U.S. states.
Foreclosures have already hit record highs in the majority of the U.S. and they are beginning to show a broader extent of damage to the overall economy. But the epidemic of foreclosures will also provide the best buyers real estate market in years for many new home buyers and investors.
The CEO of RealtyStore.com says the epidemic is developing into “the perfect storm” of foreclosure activity. “With 2 million subprime loans resetting over the next 12 months, higher gas prices and with banks tightening mortgage standards the foreclosure activity sweeping across the nation will grow,” said Tim Chin, Realty Store President and CEO.
The tightening of lending standards will further depress real estate sales, creating a wave of foreclosures that will bring down home prices as bank owned properties generate downward pressure on prices. As a result of higher gas prices consumers are spending more on gas and less on other necessities, slowing consumer spending. Housing Predictor analysts forecast the national economy is moving into a recession, which will become apparent at the latest in the third quarter of 2008.
In Detroit, where real estate foreclosures are the highest in the nation the U.S. Conference of Mayors is holding a meeting today of big city mayors to deal with the crisis. It will include talks on the state of the mortgage industry and examine ways home owners can avoid foreclosure. Mayors also hope to find strategies to keep foreclosed properties from dragging the quality of life down in their communities.
Detroit Mayor Kwame Kilpatrick is hosting the forum. “We’re talking about finding a local solution to a national problem, “ said Kilpatrick, who added that mayors will not be considering legislation to solve the national epidemic. “We’ll start with conversation here.”
Cities hardest hit by foreclosures in Arizona, California, Florida, Indiana, Michigan, Nevada and Ohio will be a focus of the conference.
Housing Predictor forecast early this year that 3 million foreclosures will occur through 2009. More than one million homes have already been foreclosed, most of which have been subprime mortgages. But defaulting mortgages are also growing in exotic conventional loans, also known as Alternative A mortgages.
To find out more about the foreclosure forecast and search for foreclosures visit http://www.housingpredictor.com