U.S. Suburbs Become Face of Foreclosure

America’s Housing Market: Where It All Began
August 20, 2009, The Economist

Signs of stabilisation should not obscure the big problems still ahead.

He is hardly your typical distressed seller. Hugh Hefner recently sold his personal residence in Holmby Hills, California, next door to the Playboy mansion, to a 25-year-old entrepreneur for $18m—some 36% below the asking price. It will come as little solace to the ageing Lothario that the discount looked about right: house prices have fallen by one-third from their peak nationwide, and by much more than that in the worst-hit states, such as California, Florida and Nevada.

U.S. Suburbs Become Face of Foreclosure
August 24, 2009, Financial Times

Apart from the piece of paper in the window, the house looks like every other Midwest suburban home in the Lakewood Springs development in Plano, a small town about 50 miles west of downtown Chicago. Plano sits at the western end of Kendall County, at the edge of where metropolitan Chicago blends into rural Illinois. Ten years ago, the area’s flat prairie land was covered in corn and soy bean fields. But between 2000 and 2007, Kendall became the fastest-growing county in the US, as people moved out to Chicago’s far-west suburbs in search of more affordable property in its “bedroom communities”. With the economic downturn, the housing boom has turned to bust. Kendall County now has the highest foreclosure rate in Illinois, with one in every 26 households receiving a foreclosure filing in the first six months of the year – three times higher than the state average and well above the national average of one in every 84 homes.

‘Cash is King’ in Market for Foreclosed Homes
August 22, 2009, San Francisco Chronicle

Cash offers close escrow quickly and easily, while offers with a mortgage now often take 45 days or longer to close and can fall through if the financing hits any snags. All-cash sales are most common where prices are low and bank-owned properties account for the lion's share of listings. In foreclosure-ridden Pittsburg, for instance, 42.7 percent of home sales in the first three weeks of July had no record of a purchase loan, according to county data analyzed by MDA DataQuick. The median price for those transactions was $105,000.