It’s impossible to escape housing market news in the media these days. Thanks to the credit crunch of ‘08, more than two million people have lost their homes to foreclosure and the aftershock of that massive collapse has been felt in every corner of the country. Here’s how the cascade of foreclosures has affected your local housing market:
1.) Average Market Price Down.
Nothing drags property value down faster than a foreclosure in the neighborhood. The median home price in the U.S. has dropped nearly 40% in the last four years, making it hard to justify selling a home – especially if you’re underwater on the mortgage.
2.) Real Estate Auctions Up.
Due to the slumping economy, more and more people are choosing to sell their homes at auction rather than through a real estate agent. In a market where buyers are few and far in between, real estate auctions can match a property with its new owner in a matter of hours, making the best out of an otherwise dire situation.
3.) New Generation of Homeowners.
If there’s a silver lining, it’s that the wave of foreclosures has made home ownership viable for young families. Instead of rotting away, these vacant houses are being filled by new families who need a place to live. This doesn’t make up for the millions of people who lost their homes in the first place, but it helps take away some of the sting.
Local housing markets everywhere were hit hard by the cascade of foreclosures that resulted from the 2008 credit crunch. Home prices that were skyrocketing four years ago are sinking to the bottom today. Things will turn around, but in the meantime everyone can do their part to stem the damage by buying and occupying those foreclosed houses.
Best,
– Todd Gladis, Senior Vice President
P.S. Visit the FHA website to learn more about buying a foreclosure as a young professional.
