With the real estate market still in flux, there are many questions regarding foreclosures, as they have risen and fallen over the past year. This is partially due to the rise and fall of housing prices in St. Louis, as the market is determining whether it will fully recover or not.
Over the past year, foreclosure activity has risen by about 10%. In turn, over the past year foreclosure sales also rose. So clearly there are some great opportunities for home buyers, while others are still struggling in the poor economy. This is a warning to those who believe the market is back into full swing, as nothing is certain yet. St. Louis still may have some work to do to get out of the housing bubble for good.
One positive trend is that shadow properties (properties that are in foreclosure, bad mortgages or owned by lenders that are not listed) are down. This is a good indicator that the amount of foreclosures are likely to fall in the upcoming year.
There are other indicators of a positive trend also. As of now, house prices remain stagnant, while rent prices are on the rise. If this continues, it will soon be cheaper for many to buy a home instead of renting long-term. With housing prices remaining fairly low, the opportunity to find a great deal remains.
Still, many sources have said that prices are falling. A major reason this is occurring that many have overlooked is foreclosures themselves. With the huge number of foreclosures accumulating over the years, there are still devastating effects on the real estate market in St. Louis today. In low income areas, foreclosures are still happening at a steady rate.
This affects home owners within those neighborhoods. With so many houses vacant, housing prices drop steadily throughout the entire area. In some cases, home prices are cut in half! What is left behind is communities who are struggling to remain intact. Plus, with prices dropping in these areas, it is difficult for those owners to sell for enough money to move. That is assuming they can find buyers who want to invest in “dead” neighborhoods.
Governments are also losing money because of this. With home values dropping, they are receiving less tax revenue from those properties. This presents a whole new problem for the local market. Less money for schools and services hurts the whole city, and can also bring down property value.
While foreclosures are becoming less of a problem in some areas of St. Louis, low income neighborhoods still face a tough task. With the market still in flux, big changes might need to be made in order for St. Louis to get on track for a full recovery.