How about a little more perspective on the great American foreclosure scare?
In the state of Tennessee for the first quarter of 2008, one out of every 216 homes (0.4%) experienced some sort of foreclosure filing and just one out of every 585 homes (0.17%) was actually repossessed by a bank. Both numbers are below the national average.
Memphis, which had the 20th highest foreclosure filing rate (one out of every 108 homes – almost one percent) among American cities, accounted for 40 percent of Tennessee’s filings even though it only contains 20 percent of the state’s homes. Remove Memphis from the statistics and the rest of Tennessee’s foreclosure filing rate drops to 0.35% or one in every 289 homes, which is well below the national average of one in every 194 homes (0.5%).
Similarly, on a national basis, five states–California, Florida, Texas, Ohio, and Michigan–account for 54.2 percent of all foreclosure filings even though they contain just 32 percent of America’s homes. California contained nine of the nation’s top 20 metro foreclosure rates. In those five states one out of every 115 homes (0.87%) was subject to a foreclosure filing while in the remaining 45 states just one of every 288 homes (0.3%) had a filing in the first quarter.
What’s the point of all of these stats? (By the way, here is where we got them.)
Foreclosures represent a true crisis in isolated parts of the country; i.e. the top five foreclosure states listed above. Even in Tennessee, where foreclosures are low, the statewide numbers are skewed by the heavy activity occurring in Memphis. And in those places that have been hardest hit, the numbers project to a foreclosure FILING rate (the rate of actual bank repossessions is much lower) of less than 5 percent for the year. That means that more than 95 percent of homeowners will NOT have a filing against them. In Tennessee, that rate is well above 98 percent.
Don’t let the foreclosure statistics as presented by the national media scare you away from the real estate market. A high filing rate in California should not keep you from buying or selling your home in Murfreesboro. That would be as crazy as wearing a parka on a 90-degree Rutherford County day just because the news said the temperature was below freezing somewhere in northern Montana.
(We went to the US Census Bureau to research the total number of homes in the United States, and in the states of Tennessee, California, Florida, Texas, Ohio, and Michigan.)
