Let’s Stay Optimistic

Let’s Stay Optimistic

While much of the nation is geared up for 2008 to be the worst year on record for real estate foreclosures, Michigan, traditionally near the top of the list for state’s with the worst foreclosure rate, experienced a substantial drop in property foreclosures during the first month of the year.

A recent report comparing the foreclosure inventory for January of 2007 with January 2008 showed that the rate in the current year is 8 percent lower than it was a year ago. Furthermore, the statistics showed a 7% drop in real estate foreclosures from December to January, remarkable considering that in many locations December is one of the slowest months for foreclosures.

This also resulted in a drop in the states with the highest rate of foreclosure. While Michigan held solid to the number three spot behind Florida and Nevada for most of 2007, it has now dropped to 10th on the list.

Of course, it’s far too early to tell if this will have any lasting effect on the real estate foreclosures market in the state. With a sluggish economy and more adjustable rate mortgages scheduled to go into periods of adjustment during 2008, we have yet to see whether Michigan’s housing market will slowly begin to rebound, but it is a promising sign.

Several other states experienced drops in their foreclosure rate in January, and experts are attributing this to state and federal efforts to start raising awareness amongst citizens about what to do when faced with a default to avoid a foreclosure. In some cases, homeowners are even receiving money or stalled proceedings to allow them to catch up. However, as time goes on we’ll see if this is actually helping people to start being able to deal in a timely manner with their mortgages, or if they are simply temporarily preventing the inevitable.

For investors, getting involved in the Michigan real estate foreclosures market could still be risky, but for homebuyers there may not be a better time. There are plenty of great Michigan foreclosure homes out there that would make great family residences for cheap prices, and if you’re willing to wait out the market, these could become incredible investments once property values start to rise again.