Hitting too close to home

Tucson recently ranked number three on the latest Realtytrac list of foreclosure filings. This dilemma is hitting all types of neighborhoods and price ranges. In my own neighborhood there's now both a foreclosure listing as well as a short sale.

I would never have expected foreclosures in my own neighborhood, but I'm not surprised by anything anymore. One of the above mentioned homes was bought as an investment while the other was bought when the market was at its peak in late 2005. Both are in less then desirable locations as they back up to a now two lane/soon to be four lane roadway which produces quite a bit of road noise. Both have been sitting on the market a long time and have not gotten offers for this reason (IMHO). Both are now priced extremely low which will inevitably affect our neighborhood's home values. Now we're seeing the prices of the other non distressed homes in the neighborhood dropping as they try to remain competitive.

Something I find even more discouraging is the new construction homes that are going into foreclosure before the communities are complete. The foreclosures and short sales I'm seeing are affecting property values of already completed homes as well as current builder pricing. While it's great for buyers, those homeowners that bought when prices were high are now stuck with homes worth a lot less then what they paid i.e. no equity. The majority of high dollar homes filing for foreclosure were purchased at the height of the real estate market; combine high home prices with excessive use of home equity and you have a recipe for disaster. What's a home owner to do?

Many homeowners are just holding on right now, trying to ride out the wave, while others are turning to "walk away" companies for assistance. I'll touch base about these types of companies in tomorrow's blog. Right now I've got to go show some property!