Wednesday, August 23, 2006

'A Lot Of Hard-Luck Stories' In Arkansas

A foreclosure report from Arkansas. "The number of Arkansas homes in some stage of foreclosure is up nearly 20 percent for the first six months of 2006 over the corresponding period last year, according to Realty-Trac. Some central Arkansas firms that do foreclosure work have seen a big rise in business in recent months."

"One trend is that pricier homes are being lost. 'We’re seeing this around a house payment that’s $ 1, 000 rather than $ 500 or $ 700 per month,' said Rosanna Henry, managing partner of a Little Rock law which focuses on foreclosures."

"'It’s not just people with the small homes,' said Ann Ball, president and managing broker of Crye-Leike’s Real Estate Owned division in Little Rock. Many homeowners 'are living beyond their means and have no money saved and are up to their necks in credit cards,' she said. Ball said Crye-Leike, one of the largest managers of foreclosed homes in central Arkansas, recently received five high-priced properties in Maumelle in a month. Crye- Leike is also hiring three additional employees to supplement its staff of 12 to handle a big increase in foreclosures, from 10 to 15 new properties a month at the beginning of the year to 30 to 40 a month now."

"Ball said about a third of those new properties are priced over $ 200, 000, and there are a greater number in the $ 500, 000 range. The average price of a home in Arkansas for the first six months of the 2006 was $ 147, 798, according to the Arkansas Realtors Association."

"In the first half of this year, 6, 089 homes in Arkansas were in some stage of foreclosure. RealtyTrac’s Rick Sharga said many of those houses will never actually be foreclosed because the homeowner will catch up or sell the house."

"But the wild card in foreclosures, and what could cause an even greater increase in the next two years, are adjustable rate mortgages. Ball, the Little Rock Realtor, said she recently dealt with a property in Maumelle where the monthly payment on an ARM had shot up from $ 5, 200 to $ 6, 600 over the course of a year. The homeowner could not keep up, and the house was foreclosed."

"Some homeowners who face foreclosure have overextended themselves lured by a bigger home or that extra amenity. 'It goes back to living above your means,' Ball said. 'There are a lot of truly genuine hard-luck stories,' Ball said."

2 Comments:

At 7:13 PM, Blogger OC BEAR said...

These ARM's are a ticking timebomb nationally. They have created an affordability illusion across much of the country.

When there availability is taken away from most due to the defaults, where will the buyers come from?

This thing is gonna build speed on the downslope as many try to sell into a falling market as their reset's kick in and can't get a loan as standards are tightening.

Rinse & repeat. Speed of Light by 2009.

Get out of the Dollar, and keep your Powder dry. 7 consecutive quarter's of negative growth are not out of the question.

 
At 3:10 PM, Blogger Chip said...

Ben - since yesterday (Wed) I have had increasing difficulty getting into or posting on your housing bubble site. Now I can't get in at all -- I get either a blank screen or a WordPress message. Hope it's just a technical server glitch and not someone attacking your blog.

 

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