Recent headlines are saying, “foreclosures are on the rise.” A lot of people remember the 2008 crash, and all the foreclosures that happened during that window. But this isn’t a repeat of what happened back then.
Foreclosures are rising, but they’re still historically low. Foreclosure filings are up 26% from a year ago, and they’ve been rising for 5 straight quarters. That’s a real trend worth paying attention to, but it’s not as scary as it seems. The reality is that the increase we’re seeing signals market normalization.
The extremely low numbers we saw in 2020 and 2021 don’t represent what’s “normal.” That’s when the government put a moratorium on foreclosures to help homeowners get through the pandemic. Those years were an exception, not the baseline.
If we look at the foreclosure numbers from 2017, 2018, and 2019 – the last years the market ran normally — we see that today’s numbers are still lower than those years. So, we’re not even back to what’s typical, yet.
While today’s numbers are getting closer to pre-pandemic levels, they’re still below historical norms. And just look at what was happening around 2008. Even with the recent increase, we’re nowhere near those levels. This is a market returning to normal, not heading toward a crisis.
Additionally, most foreclosure filings won’t result in a completed foreclosure. That’s because today’s homeowners have something most people in 2008 simply didn’t have: EQUITY. Back in 2008, many people owed more than their homes were worth. Selling wasn’t an option, and foreclosure was often the only recourse.
Today, that’s not the case. If you have enough equity to cover what you owe and the cost of selling, you can sell your home, pay off your debt, protect your credit, and potentially walk away with money in your pocket. That’s a completely different situation than what homeowners faced during the last crash, and it’s a major reason we’re unlikely to see foreclosures spiral as they did back then.
If you are curious about your home equity, reach out to me today. I will provide you with the data specific to your home and neighborhood so you know where you stand. I’m here to help with all of your real estate needs and questions.
Laura Harbison, ABR, AHWD, BPOR, BS, CDPE, CRS, DRB, GRI, PSA, RSPS, SRES
Broker/Owner REALTY EXECUTIVES SOUTHERN NEVADA PROPERTIES
License NumbersB.0026537LLCPM.0164922.BKR
