A Super Bowl Year For Foreclosures

The stadium at the University of Phoenix where the Super Bowl was just played can hold almost 74,000 people. That's a lot of folks, and yet it would take almost 30 of those stadiums to hold all the households that received foreclosure notices during the past year.

The final 2007 figures from RealtyTrac.com show that foreclosure actions increased 79 percent when compared with 2006. Roughly 2.2 million households received default notices, auction sale notices and notices of bank repossessions. Not all of these homes were lost -- about 1.3 million were sold at the courthouse steps but the rest are hardly safe: They belong to distressed homeowners, people likely to sell fairly soon if they can whether prices are up, down or sideways.

These forced sales, when they appear in official records, will become part of the "comps" used to value your home if you sell or refinance. And if the comps are down you can guess how the world will price your house.

Look for more of the same in 2008 and perhaps worse. Just in the toxic loan category, the Federal Deposit Insurance Corporation now estimates that "almost 1.3 million hybrid loans are scheduled to undergo their first reset during 2008. An additional 422,000 subprime hybrid loans are scheduled to reset in 2009, which means these problems will not end anytime soon."

What can you do? Don't panic. Once the current inventory of exploding ARMs is refinanced or terminated there will be less downward pressure on home prices. Until then, buy and refinance with fixed-rate loans at today's low rates and pay down consumer debt. Most importantly, ask nearby brokers about sale trends in your community because national numbers may not reflect local real estate patterns.

2008 Realty Times - by Peter G. Miller

"Fingers Crossed"

Milwaukee Journal Sentinel (01/19/08) Cleaver, Joanne

Full-year results indicate that southeastern Wisconsin escaped the worst of 2007's residential property meltdown. Now, brokers note, pent-up demand is beginning to break logjams that have scuttled many prospective sales. Beth Jaworski, chairwoman of the Greater Milwaukee Association of REALTORS®, notes that January seems to have revived potential buyer interest in at least looking, if not buying. By contrast, she adds, December was so slow that "you wondered if your phone was working." Meanwhile, Milwaukee-based REALTOR® Kathleen Winkelmann says she and her colleagues are working harder than ever to craft incentives--through more generous commissions to buyer's brokers, for example--to grab attention for their home listings. In addition, asking prices are now written on Post-It notes, not labels, to account for fluctuating market conditions locally. Market data compiled by the Metro MLS and released earlier this month determined that average prices were essentially flat last year in Washington and Racine counties and eroded last year in Waukesha and Ozaukee counties. Milwaukee County reported a 4.9 percent increase in average sale price, due both to the rebounding popularity of close-to-downtown neighborhoods and to the influx of higher-end condos into the resale market.