The Foreclosure Report

A 'Foreclosure Bubble" For Dallas

From the Dallas News. "The biggest threat to the local housing market isn't overheated prices or a slowdown in sales. What has the greatest potential for problems is the North Texas foreclosure bubble. So far this year, more than 35,000 homes in the Dallas-Fort Worth area have been posted for foreclosure. More than 15,000 homes have been taken by lenders when the owners couldn't keep up with the payments."

"That means more than a quarter of the pre-owned houses up for sale in the Dallas-Fort Worth area are foreclosed properties. Is that a problem? You bet it is. In the late 1980s and early 1990s, a surge in home foreclosures destroyed residential values in Texas."

"Eventually the sale of reduced-priced foreclosed houses drives down overall residential values. So far, lenders have been holding the line on foreclosed property prices. They remember what happened in the last crash and don't want a repeat of the home fire sales."

"But with the inventories of foreclosed houses growing in other U.S. markets out West and in parts of Florida, I wonder how long the lenders will be able to keep their prices up."

"And there's no sign that home foreclosures are slowing. In November, postings were up almost 50 percent in the D-FW area."

"On Sunday an auction company will be peddling about 80 homes in the Dallas-Fort Worth area. The properties it is selling range from $10,000 to more than $400,000, according to spokeswoman Crystal Wright. The homes include everything from a 999-square-foot condo in northeast Dallas to an almost new 4,000-square-foot house in Frisco."

"'It's a real opportunity for people to get properties in good condition at significant discounts,' Ms. Wright said."

posted by Ben Jones @ 9:00 AM