A recent article in City Business magazine states that foreclosures in the Louisiana real estate market rose 70% from the 4th quarter of 2007 to the 1st quarter of 2008.
One in every 944 households in Louisiana received a foreclosure filing in the first three months of this year. That’s well below the U.S. rate of one in every 194 households, according to an online foreclosure database.
Irvine, Calif.-based RealtyTrac’s first-quarter 2008 U.S. Foreclosure Market Report lists 1,938 Louisiana properties with foreclosure filings, an increase of 70 percent from the fourth quarter of 2007 and 31 percent from the first quarter of 2007.
Read the rest of the article here.
Although this is a drastic increase, Louisiana is still ranked #37 in the nation for foreclosures. (Finally, a low ranking that we want). The article made me realize that I haven't taken a look at the foreclosures on the West Bank for quite awhile and that it's time to see how this shift is affecting our neighborhoods.
Back in February 2008, there were a total of 77 bank owned or foreclosed properties on the West Bank listed for sale in the New Orleans Multiple Listing System (MLS). As of today, there are 69 active bank owned or foreclosed properties for sale on the West Bank.
While this may sound like it contradicts the City Business article, it is important to realize that when a bank starts the foreclosure process on a property, it does not list the home for sale right away. It takes time to go through the legal process of foreclosure...time during which the property is typically not well maintained and is often without utilities. With our long, hot, humid summers, a lack of air conditioning can cause a home to deteriorate very quickly, making repairs to it even more extensive AND expensive. Additionally, some disgruntled and frustrated owners are stripping their homes of everything they can, leaving behind a shell of a house when forced to move out by the bank.
I've received several inquiries recently from people who are convinced that the best deals to be had on the West Bank are in foreclosures. And that may be true for some. But many of these homes need more tender loving care than a first time home buyer or amateur investor is prepared to put into them in terms of time, money and effort.
There are more homes for sale on the West Bank than we have seen in years in many areas.
Buyers should not let the media focus on foreclosures give you tunnel vision when shopping for your next home, causing you to pass up some of the great deals that can be had on properties that don't require the repairs that a bank owned property may need.
In the meantime, sellers need to keep a close eye on the number of foreclosed properties for sale. When the number of bank owned homes in an area increases, it can have a negative affect on the prices of ALL of the homes in a neighborhood as buyers seek out the best perceived value for their mortgage dollars. Staying up to date with your neighborhood competition just became more important than ever.
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When buying or selling a home on the West Bank of New Orleans or relocating to the New Orleans West Bank, you deserve local expertise and advice. List Heindel provides full time, professional real estate services to buyers, sellers and military transferees in Algiers, Algiers Point, Belle Chasse, Gretna, Terrytown, Harvey, Marrero, Westwego and more.
Here's the disclaimer part: The opinions expressed here are strictly those of the author, but you are free to share yours in the comments. All information is deemed reliable but not guaranteed,
Copyright 2008. Lisa Heindel, All rights reserved.
Lisa, We are noticing an increase in our Bank Owned Homes for sale as well. All the properties that don't sell in a short sale or a foreclosure come back on the market as bank owned.
Lisa, I've heard of people stripping the homes and utilities being turned off but I didn't realize the deterioration taking place....it's good information to share.
Mana, we have been very lucky that our foreclosure rate is nowhere near those of many other states. I'm hoping that this is just one interpretation of the numbers and that this turns out to be another media slant to it. After all, if there are 2 foreclosures today and 4 tomorrow, I could be yelling that they have doubled. I'm looking forward to seeing how it actually shakes out.
Carole, in an area with so much heat and dampness, these houses can deteriorate quickly. I'm sure the same issues happen in Florida and other coastal states as well.
It's sad but funny to listen to the Realtors in my association in Hemet share their listings with the other Realtors at the MLS meetings when they're REO. It's so common for people in that desperate situation to strip the home of furniture, appliances, light fixtures, toilets! Desperate times, I guess.
Not all the foreclosures are that way...many are awesome and great investments.
I'm glad that it's moderate in your neighborhood. It's sad when folks lose their homes.
Keep up the great work in New Orleans, Lisa.
Lisa, I have seen many homes stripped by the previous owners. It's good to see your area lower on the list.
Joey, certainly a foreclosure can be the right property for some home buyers. But with all of the inventory on the market here, buyers shouldn't overlook some of the great deals to be had on other homes as well. It's amazing to me how some folks are convinced that the only bargains are in REO.
Ray, I've been in a couple of real doozies lately. Very sad to see some of their personal belongings still there, like they moved in the middle of the night.