Have you heard the buzz about rising foreclosures in the housing market? Don’t hit the panic button just yet!
Chances are, you’ve come across headlines proclaiming a surge in foreclosures within today’s real estate market. It’s natural to have questions, especially if you’re contemplating the real estate market. Understanding what’s really going on is essential to decipher the truth amidst the hype.
As a seasoned Realtor specializing in loss mitigation and asset recovery, I’ve had my fair share of encounters with real estate foreclosures. However, the numbers we’re seeing today are nowhere near the staggering figures of 2008-2010. Let’s dive into the facts to put this situation into perspective.
A recent report from ATTOM, a property data provider, reveals that foreclosure filings have increased by 6 percent compared to the previous quarter and by 22 percent in the past year. While these figures might raise eyebrows, focusing solely on the numbers can breed unwarranted fear and deter potential homebuyers. In reality, these statistics do not signal an impending foreclosure crisis. Let’s delve deeper into the data with some historical context.
In recent years, foreclosure rates reached record lows, thanks in part to various relief measures, including the forbearance program, which aided millions of homeowners during challenging times in 2020 and 2021. Concurrently, rising home values allowed many homeowners to leverage their equity, preventing foreclosures. Looking ahead, equity remains a vital factor in shielding homeowners from foreclosure threats.
As the government’s foreclosure moratorium came to an end, an expected increase in foreclosures occurred. However, this uptick doesn’t equate to a housing market in distress. As Clare Trapasso, executive news editor at Realtor.com, aptly puts it, “There’s no reason to panic, at least not yet.” The initial surge in foreclosure filings stems from proceedings that were postponed during the pandemic due to the moratorium. It’s more of a catch-up process than a sudden flood of foreclosures.
To shed further light on this issue, Rob Barber, CEO of ATTOM, suggests that the rise in foreclosures can be attributed to various factors, such as increasing unemployment rates, delayed foreclosure filings after two years of government intervention and ongoing economic challenges. However, it’s essential to remember that many homeowners still possess substantial home equity, which may help stave off an excessive surge in foreclosure activity.
While foreclosures are indeed on the rise, it’s evident that today’s landscape is worlds apart from the housing crisis of the past. Factors like the ones mentioned above, combined with the improved financial qualifications of today’s homebuyers, contribute to a more stable market.
In fact, current foreclosure levels are far from the alarming figures reported during the housing market crash. It’s crucial to place the data in its proper context. While the housing market is experiencing a predictable increase in foreclosures, it remains a far cry from the crisis levels witnessed when the housing bubble burst. This uptick will not lead to a catastrophic crash in home prices.
Even in normal conditions, foreclosure happens in every real estate market cycle, because sometimes bad things happen to good people: death, divorce, an unexpected job loss, medical emergencies and other financial hardships bring financial risk to every homeowner. The real estate landscape today is significantly different from what it was during the housing crisis, and we’re better equipped to weather these challenges. The real estate market remains resilient, and the number of foreclosures that do exist locally are sparse at best.
If you’d like to learn more about the current local market conditions or explore available options, or subscribe to local market statistics that you can follow at your own pace, reach out to Theresa Grant, Real Estate Broker (DRE #01202881) at [email protected]. You can also follow her on Instagram, @theresagrantrealtor, and YouTube, @theresagrantrealtor.