At any time, there are always some foreclosures taking place. Unforeseen events, such as an illness, job loss, divorce, or a death can cause mortgage payments to fall behind. On average, foreclosures affect about 3 percent of all outstanding mortgages.
This dramatically changed during the Great Recession. The abnormally high foreclosure rate caused a downward spiral in home values. Foreclosure statistics became closely watched by analysts and the media ever since. Any change in foreclosure activity can prompt a headline, which is where we are today.
In mid-January, the Columbus Dispatch reported, “Foreclosures shoot up in Columbus.” Technically, yes, foreclosures increased in 2022, but there are good reasons why the 74 completed foreclosures in Central Ohio are not cause for alarm.
1. The Columbus real estate market has been strong for several years. Low inventories of homes for sale pushed up prices and increased homeowner equity. When distressed homeowners have equity, they can sell the property to pay off the mortgage, avoiding foreclosure and possibly netting some cash in the process.
2. Most everyone who obtained a mortgage in the past 10 years did so with well-documented income, savings, good credit and a down payment. Those who passed the high bar set by lenders present a lower risk of mortgage default.
3. Investors own a number of single-family homes. Wall Street entered the housing market during the Great Recession, scooping up foreclosed homes in bulk transactions. Single-family homes became an asset class, and investment activity evolved beyond foreclosures. Investors typically pay in cash, meaning fewer mortgages are active in the residential market.
4. Central Ohio has one of the best economies of any metro in the United States at present. A robust economy helps reduce the odds of job losses that could potentially lead to mortgage defaults. Also, our strong economy keeps home demand positive, which takes us back to point #1.
This doesn’t mean foreclosures won’t happen. But the perfect storm that led to the foreclosure surge during the Great Recession is unlikely to repeat.
You can give yourself the best home buying protections in the industry by working with an Exclusive Buyer’s Broker! As Exclusive Buyer’s Brokers, we serve your best interests at all times. Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services www.BuyersHome.com
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7100 North High Street, Suite 204, Worthington, Ohio 43085
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