Foreclosed multi-family properties increasing in Houston,TX while rents and selling prices are rising. Why?
Answer:
The reason for many foreclosures has to do with people getting 5 year ARMS...They are becoming mature now and many people couldn't or didn't refinance those mortgages..Maybe some lost their job or had some health problems and they couldn't refinance..In other words, many got into financial problems, and now cannot pay there mortgages..
The primary reason there has been so many recent foreclosures and many more to come, is because of how easy it was to get home buyers financed the past 5 years. The rents should rise as a result due to the higher interest rates. As for higher selling prices of houses I am surprised to hear about, but I don't know the Houston market. Perhaps the bubble hasn't burst in Houston or Houston's market has just been stable and its' houses are simply ascending in value as they normally have (or both). Perhaps the one thing you haven't noticed is the number of sales is a lot different than a year or two ago.
I noticed the same thing.however, rent are not rising.The number of foreclosure is mostly due to ARM loans and loans with no down payment. Now,the rising house market value is settling..down.people owe more than the house is worth. If they sell the home..they will be upside down..can't even AFFORD to sell the home, because they have to bring money to the closing.
However, I think there is an upside to this..for investors.
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