It was reported last week that foreclosures have exceeded the 1 million mark nation wide. A vast majority of those however are located in just 4 states, California, Nevada, Colorado, and Florida. Washington State has less than 1% of all foreclosures nationally. But don't be fooled there are still people in Washington State that are at risk of foreclosure. Most of the foreclosures nation wide have been blamed on adjustable rate mortgages, when the buyer was offered a "teaser" rate then saw their house payment increase significantly over the next couple of years. We believe that some foreclosures in the Seattle area have and will be the result however of buyers paying too much for the home when they bought it over the last couple of years.
Seattle has been one of the last areas in the US to see any downturn in the real estate market. In the fall of 2007, we started to see our real estate market change and prices have fallen some and inventories have increased since then. There is still good activity however, and there are buyers ready to buy but sellers have to go about selling their homes much differently now. The latest foreclosure statistics have Washington State in about the middle of the pack in the US, ranked No. 27 for foreclosure filings in May 2008 according to RealtyTrac, which tracks default and auction notices and bank repossessions.
Washington State has seen almost an 18% increase in foreclosure filings compared to the same time in 2007 however, according to the report. Nationwide, RealtyTrac said foreclosure filings rose year-over-year for the 29th consecutive month and in May 2008 record the highest foreclosure-filing rate since the report began in 2005. One in every 483 households received a foreclosure filing during that month, according to RealtyTrac.
The Tacoma area, Pierce County, is #1 in the state for foreclosure filings, according to the report, with one in every 574 households going into foreclosure. Interestingly, though, that number was a 6% decrease from the same time period in 2007. The Seattle area, King County is #2, Clark County is #3, and Snohomish County is #4 in the state, as of April 2008.
A new law (in Washington State) took effect on June 12, 2008 intended to protect homeowners from foreclosure scams. See Washington State Adopts a New Statue that May Harm Distressed Homeowners
While this new law has many good parts to it, and will help protect people form equity skimming scams, it will also, most likely, discourage many real estate agents from helping homeowners facing foreclosure sell their homes. The new law also effects home buyers and depending on the situation the buyer may not want to buy a home that is within 20 days of the foreclosure date because of unnecessary but real liabilities.
There will be real estate agents in the Seattle area that will see an opportunity created by this new law and increased number of people going into foreclosure that will get involved with foreclosures, now called distressed homesellers. Some of these agents will do a fine job and others won't...so business as usual I guess!.
Stay tuned for several more articles on Foreclosures and Short Sales and some of the Do's and Don'ts to this very complicated process.