Distressed properties to rise
January 21, 2003
Pre-foreclosure data co. says foreclosures to increase in N.Y., Phoenix, SoCal
Inman News Features
Foreclosure activity in the New York City metro area will see no letup in the coming months, according to Foreclosures.com.
Foreclosures.com President Alexis McGee cited the rapid rise in unemployment rates in the city along with the cooling housing market as indicators for distress among homeowners.
"The jobless rate in New York City has jumped to 8 percent as of November," said McGee. She said that rising and persistent joblessness in combination with a softening housing market pointed to a potential rise in residential mortgage defaults in the near future.
The company also reported that despite improving economic news, more Phoenix metro area homeowners may be forced into foreclosure in the coming months as well.
"Foreclosures are a lagging indicator of economic malaise," said McGee. "When a homeowner goes into foreclosure, it usually reflects economic woes that occurred three to six months earlier."
McGee said that economic recovery hasn't made it to Phoenix yet, citing job growth last year at 0.4 percent. She added that the 25 percent surge in residential building permits from September to October last year would bring new inventory online early this year, putting more pressure on resale prices.
McGee also said the price growth in the southern California markets may result in a rise in foreclosure activity.
"If we don't get a cooling off period to let incomes catch up to prices, we're going to see prices turn around. That will squeeze homeowners with money problems even more, and foreclosure activity will increase again," said McGee.
The company reported that foreclosure activity is down slightly in Los Angles and Riverside counties but that many entry-level buyers were leaving the area.
Sacramento, Calif.-based Foreclosures.com is a distressed property investment advisory company and publisher of pre-foreclosure property data.
Copyright: Inman News Service