Foreclosures rise as market slumps

In the U.S. housing market, some of the most important indicators are on the decline. In February 2007, 18.3 percent fewer new homes were sold than in February 2006, according to the U.S. Census Bureau. And, says the National Association of Realtors, in the fourth quarter of 2006, the median sales price of an existing single-family home in metropolitan areas nationwide dropped to $219,300 from $225,300, a fall of 2.7 percent. Throw in the imploding market for subprime mortgages, and the negative news only gets worse.

Still, one real-estate figure is on the rise: the number of foreclosures. In 2006, more than 1.2 million foreclosure filings took place nationwide, according to RealtyTrac’s U.S. Foreclosure Market Report. That jump of 42 percent from a year earlier represents a foreclosure rate of one filing for every 92 American households. The top 10 foreclosure cities are Detroit; Greeley, Colorado; Atlanta; Fort Worth, Texas; Las Vegas, Nev.; Vallejo, Calif.; Camden, N.J.; Palm Bay, Fla.; Olympia, Wash; and Dallas.

Filing for foreclosure typically points to a homeowner in desperate financial straits. But if you’re in the market for a home, buying a foreclosed property could save you some money. In January 2007, the average foreclosure sales price nationwide was almost $166,000, says RealtyTrac. That’s on average 27 percent below the market value of the homes. If you’ve pulled your house off the market and have decided not to sell it, now might be the time to undertake some needed fix-ups.

Yahoo has just opened a hub where you can research foreclosed properties. While this free area does not give you access to all of the information that you’ll get with a subscription to RealtyTrac or other similar site, it will provide you with some bargain-hunting basics.—Steven H. Saltzman