There was a funny article in yesterday’s Austin Statesman about local foreclosures: [Although I don’t think it was meant to be funny.]
Foreclosures in the four-county Austin metro area are up 42 percent from a year ago, according to the latest figures from Foreclosure Listing Service, an Addison company that tracks foreclosures.
Postings for the July 1 auction show a 39 percent jump in Travis County, 48 percent in Williamson, 27 percent in Hays and 61 percent in Bastrop.
OK, that part wasn’t so funny. Here’s where I started laughing:
Central Texas is in better shape than many other areas of the country, where foreclosures have been sharply rising for months and real estate sales are in a deep slump.
But George Roddy, president of Foreclosure Listing Service, said local postings "are at the high end of the foreclosure cycle."
The Austin area has less exposure to subprime mortgages, which are behind high foreclosure rates in other cities. Another factor is adjustable-rate loans that are resetting to higher rates, resulting in bigger mortgage payments that homeowners can’t handle.
We were just told sales were down 47%, then told that Austin doesn’t have sharply rising foreclosures like other areas? The article doesn’t report the sales numbers that show Austin is not in a "deep slump", but here are May’s figures courtesy the Austin Real Estate Scene:
The Month in Review for May 2008
Units (homes for Sale): (compared to May 2007)
- New listings were up 26%.
- Pendings were down 67%.
- Solds Units decreased by 28%.
Maybe down 28% is just "slump" instead of "deep slump".
In spite of Roddy’s comment about "high end of the foreclosure cycle," it’s unlikely foreclosures are trending down anytime soon:
Austin-area foreclosure postings
July ’08 July ’07 % change
Austin metro 42%
I’m glad it’s not my job to try and put a positive spin on this mess. I find a huge disconnect between these numbers and "Don’t worry, be happy."