Monday, February 01, 2010

Foreclosures new hot spots – Birmingham, AL

The new foreclosure plague is tied more to the economy than bad mortgages. According to CNN, Birmingham is one of the ten cities where defaults grew the fastest in 2009.

Foreclosure rate: One in 61 homes
Percent increase: 267%
National rank: 85th
Unemployment rate: 9.5%

The recession did more damage to the Alabama’s economy than it did nationwide, according to University of Alabama economist Sam Addy. The unemployment rate swung from lower than the national average to greater than the national average.

In the Birmingham metro area it went to 9.5% in November from only 5.2, 12 months earlier. Employers laid off many workers in the state’s manufacturing sector.

The big run up in unemployment turned Birmingham from an area relatively free from the foreclosure plague to a foreclosure rate of one for every 61 households. That was still slightly lower than, but much closer to, the national average of one filing for every 45 households.

The rapid rise in foreclosures is almost totally related to the economy; home prices in the area have remained very favorable with a median price of around $130,000 according to the Wells Fargo-National Association of Home Builders figures. With prices so low, few buyers had to rely on exotic loans to get them into homeowners.

Courtesy money.cnn.com

(Permalink)