League City Foreclosures 2009

Almost daily the news is talking about foreclosures and their impact on the economy. Foreclosed homes are those that the bank has taken back from the buyer because they are unable to pay their mortgage. The media talks in generalizations because they have to appeal the masses but how big of an issue are foreclosures in League City?

If you look at the chart above you will see foreclosures increased almost double from 2006 to 2007.  While the numbers look staggering the reality is foreclosures only accounted for 9% of all of the sales in 2009.  In a normal non recession year like 2005, foreclosed homes made up 4% of the total market. In 2007 and 2008 foreclosures were caused by bad sub prime loans but in 2009 and 2010 the cause is unemployment.  The media typically talks about California and Florida where foreclosures and short sales have made up 70% of all sales which in turn drives values down. Since the vast majority of sales in League City (91%) are between normal buyers and sellers values have not been affected by foreclosures.