Goldilocks and the Three Bears: Here We Go Again “The New Normal: Foreclosures Not Abating Until 2013
After reviewing the recent numbers for 2009 published by RealtyTrac, nothing is “just right” and won’t be for some time. With foreclosures on the rise in 2009, the new “three bears” to hit the market have nearly doubled the number of foreclosures this year, and the trend will not be ending anytime soon.
The highest growth in the foreclosure market has been a result of three types of foreclosures; (1) delayed sub-prime foreclosures from 2008; (2) higher default rates on Option ARM loans, and (3) a significant rise in unemployment related foreclosures. With numbers indicating that 1 out of every 6-10 unemployed will face foreclosure, Goldilocks better find somewhere else to take a nap because there won’t be many family-owned homes left when the dust settles.
The “new normal” appears to be a staggering number of foreclosures, and is not expected to return to pre-recession figures until 2013. Foreclosures are expected to rise the rest of the year, and peak throughout 2010 and 2011. In Florida, we can expect to have about 40-50% of the foreclosures in the country, and half of these will be in South Florida. At this rate, Goldilocks will be old enough to buy her own house by the time the market rebounds.