Foreclosures used to predominantly be in the $20,000 - $60,000 market with an incremental build up once property prices started overheating that did not exceed the $90,000 mark.
Expensive houses, as a rule, did not hit the foreclosure market unless there had been some monumental catastrophe like a death in the family or serious illness which affected the family finances. Not anymore apparently if the latest listings in Baldwin County are anything to go by.
Traditionally a wealthy area with homes in the $800,000 plus range it now has several properties in foreclosures going for about $600,000 a piece. The fact that properties in that range have began to show up on foreclosure lists is a clear indication that the property market is undergoing a sharper correction than expected and it is going to start affecting property prices at a deeper level than has hitherto been thought possible.
This means that the credit crunch that has been making itself felt right across the financial market is now beginning to bite all types of income and may well continue to do so unless some sort of respite is found and the market starts to breathe a little more easily again.
High value properties hitting the foreclosure list is not good news for anyone. They will be sold of course as real estate investors move in to pick them up and sell them fast but they are the first indication we have had so far that the credit crunch we are experiencing has began to bite deeper.
The question right now is what does this mean for the real estate market as a whole and real estate investors. Well, in terms of the effects of the credit crunch it is a worrying sign and should perhaps begin to give us cause for concern. Credit crunches often lead to market shrinkage and recessionary pressures because they restrict the ability of many people to tap into money sources and that is not good news.
In the short term real estate investors will probably benefit from the new, high-ticket properties coming in the market but their ability to offload them fast may be restricted too if their potential buyers cannot raise enough money due to credit restrictions and tougher lending.
There have been rumours that the Fed, bowing to pressure brought to bear by a large number of organizations may step in and force lenders to be more transparent in their lending methods. It may also reduce interest rates and make it easier for home owners to meet payments in their mortgages in which case our current crisis may well soon be over.
This article was written by Jeff Adams, a national author, speaker and trainer who has done over 350 deals over the past 12 years. Get your FREE 7 Day E-Course and DVD “The Foreclosure Profits System" NOW at http://www.FreeForeclosureCourse.com