‘Foreclosed House 3-21-08 IMG_7996’
courtesy of ‘stevendepolo’
Actually, the housing market may be more Jekyll & Hyde than straight-up slasher villain, given the way it’s seemed to flip between everyone’s financial salvation and the eventual ruin of our economy. Unfortunately the odds are that if I’m writing about it here it’s for frightening reasons, not happy ones. Even more unfortunate, it seems that we’re getting little of this news in the mid-Atlantic region because the big scare lines specify areas far from here. That doesn’t mean it’s not going to impact us, though.
The big scary news hasn’t hit the Washington Post yet, though a lot of west coast papers have been running it. The tip of this iceburg is named “option ARMs” and is about a type of loan that let people pick how much they’d repay. Not surprisingly, many opted to make the smallest possible payment – an amount that, in many cases, didn’t even cover the interest being applied to the loan. The result being that the total amount of the loan grew rather than shrank over time, which would be troubling enough even if home prices rose. Which, as we all know, they didn’t.
Presumably our region is not getting the same amount of coverage on this issue as the west because of the big quote out of the reporting agency, Fitch. “75% percent of Option ARM loans are secured by properties located in California, Florida, Nevada, and Arizona” seems to be the info line that journalists are noticing and using as a reason to write this up, or possibly not. You’ll find fresh entries on option ARMs on SFGate but not in the WaPo.
Which is too bad, because this is going to bite us in the ass too.
‘American Dream, after Grant Wood’
courtesy of ‘Mike Licht, NotionsCapital.com’
The Washington Post has put together a handy little map on DC area foreclosures, including a few tools to help you see the breakdown of auctioned homes by zip code and time period over the last few years. The foreclosing of residential real estate is one of the biggest indicators of a recessed economy. And while it is the effect or result of a failing economy, it’s also one of the biggest contributing causes to the continuation of that faltering economy. It’s a downright nasty cycle to be stuck in and most likely you know at least one person who has had to suffer because of it. But if you live in Arlington or Bethesda…you probably only know one. Other neighborhoods in our area have not been so lucky.
Clinton, Annandale, Petworth? Ouch. They’ve each had between 500 and 1000 foreclosures over the last 2.5 years. Herndon, Manassas, Woodbridge? Wow – now you’re talking over 1,000 each. Including over 3,000 for Woodbridge, VA, the hardest hit neighborhood in the DC metro area. If you live there, you probably know more than a handful of people who’ve lost their homes.
Photo by Wayan
A for sale sign does not bother me. A foreclosure sign insight some worry. But its the tall grass of household abandonment that generates concern for my neighbourhood.
In this market where people are talking about 10% of borrowers behind or in default, I expect some pain all around, yet when pain becomes neglect the impact goes from citizen to community.
What is yours doing to mitigate the mortgage mess? In Petworth, I am going to cut the grass.