A six month housing market analysis reveals Tennessee is moving "up" the list of Top Ten states for mortgage foreclosures for the past six months.
The state ranks seventh for all of 2006, with Georgia coming in first for the year and second for the month of June, according to newly released study from Foreclosure.com.
The collective surge of foreclosures across the nation is a driving force in an otherwise sluggish real estate market, according to the online firm's latest analysis.
The Foreclosure.com 2006 Mid-year Market Analysis reveals that foreclosure properties are exchanging hands at almost twice the rate of existing home sales as a growing number of loan defaults convert to foreclosures.
Currently, 30 percent of foreclosure inventory is being sold each month, according to Foreclosure.com. In contrast, analysis of data from the National Association of Realtors® (NAR) indicates that only 17.7 percent of existing home inventory was sold in May 2006.
NAR data also shows that the national inventory of existing homes for sale has risen in the first five months of 2006 from 2,883,000 homes in January to 3,604,000 in May.
Per a six-month analysis of U.S. foreclosure data, new foreclosures rose from 23,982 in January to 26,972 in March, and have remained at a high level, ending the first half of the year with 27,064 new foreclosures in May and 26,802 in June.
Active foreclosure inventory levels have been declining during the same time span, with available inventory dropping from 95,073 in January to 89,352 in June. Despite higher new foreclosure rates in the first half of 2006 compared to last year, high demand for foreclosed homes has kept inventory in check.
Real Estate experts say a "major market correction" has contributed to a nationwide increase of almost 20 percent in active foreclosures."
"Everything we are seeing in the current climate in the real estate industry is driven by rising interest rates and a sluggish housing market," said Brad Geisen, president and CEO of Foreclosure.com. "This has fueled interest in the foreclosure market, creating golden opportunities for investors and people looking for good deals on homes."
"In recent years, buyers had the ability to buy more property than perhaps they could afford thanks to low-interest loans," Geisen added. "That's changing. While just a year ago sellers were in the driver's seat, foreclosure rates over the last six-months suggest buyers now have the upper hand."
According to the Foreclosure.com 2006 Mid-year Market Analysis, Georgia ranks highest among states in foreclosure rates to date in 2006, followed in order by Indiana, Colorado, Michigan, Texas, Ohio, Tennessee, South Carolina, North Carolina and Utah.
The Midwest region has registered the highest foreclosure rates in the nation over the last two years, with Michigan frequently leading the pack. However, the Midwest has seen its foreclosure rates level off in recent months showing signs of relief -- though a high number of properties still remain available.
"Our mid-year analysis leads us to believe the Midwest is less prone to a worsening foreclosure situation. But there still exists a high number of properties available, which creates a good buying environment," Geisen said.
Geisen also said that a major real estate market correction, particularly among high end homes, is upon us.
"We could be seeing less of a correction in entry-level or low-end homes than in the $500K - $2 million range. From a regional standpoint, we believe the highest appreciated states -- Florida and California -- are going to be the states with the biggest correction in the coming months," said Geisen.