Without a doubt COVID-19 is the direct cause of increased foreclosures in the last month. Places where the highest rate of foreclosures occurred, were in large metropolitan areas with populations of more than 1 million people. Topping the list in these areas were: Cleveland Ohio; Birmingham Alabama, Jacksonville, Florida, New Orleans, and Louisiana according to The NY Times.
The areas where the foreclosures have occurred are all places where the unemployment rates are higher than the national average, and often have the double negative of also being COVID-19 hot spots for infection. This sounds very high but is still below last year’s level by about 80%. The housing market remains strong, during the pandemic, but if the pandemic continues things could change and the market might very well deteriorate.
There is currently a moratorium on federal foreclosures backed by several financial institutions to keep homeowners afloat through these times. Various forms of government financial assistance is being offered for those who have become unemployed.
Rick Sharga, executive vice president of RealtyTrac a Data Solutions company says that it is a bit surprising to see foreclosure activity increasing, despite all of the help being offered. It could be that many of these properties were in the early stages of default before the pandemic.
Once the moratoriums around foreclosure conclude, these communities will be especially vulnerable. If the pandemic continues the strength will certainly go out of the housing market, and we could end up seeing more foreclosures, which would be a worrying trend.
In October, there was an increased number of foreclosures in the metropolitan areas mentioned. Many cities have higher levels of business closure and unemployment, and alternative employment will need to be found to keep many more people from losing their homes.
Dallas Real Estate Attorney Rachel Khirallah says that she is not seeing any foreclosures now but is concerned that this may change and advises those who are at risk of losing their homes to be proactive and call their bank or mortgage company, and speak to someone about your options, and where you sit at the current time.
Some Positive Signals
There are always some positive signals for investors. If you are a long-time investor you have seen downturns before and you will also know that this is when you make money by buying a good property and holding the property until things change for the better. It is unfortunate that people must sell at a low price, but their loss is your gain, and this will almost certainly be the year to pick up a few well-priced properties for your portfolio.
Worrying Times for Many
Within a few weeks the moratorium will end on foreclosures and it will be a worrying time for many people. Anywhere from 225,000 to 500,000 households are predicted to be evicted next year, because they are unable to make their home or rental payments.
Regardless of what’s to come, you can rest assured that you will be backed by the best reports and services ACUTRAQ has to offer.
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