High Unemployment, Foreclose Rates Pummel Utah

The increasing foreclose property rate in Utah has pressured home values to drop to its lowest level in almost 15 years. The decline in existing foreclosure home sales has resulted to desperation among residents who are considering or planning to sell their properties.

According to data, one out of six properties on the market for sale is priced less than the original amount paid for by sellers. Additionally, short sale accounted for 17 percent of properties under contract or listed for sale. Short sale means lenders allow homeowners to sell their mortgaged properties less than the total amount they owed for their loans.

Industry experts said that about 75 percent of almost 1,401 listed properties for short sales are priced less than $300,000. Properties priced more than $500,000 make up only 7 percent of short sale listings.

Meanwhile, 8.42 percent of Utah homeowners with mortgages are either delinquent or in some kind of foreclose process. Experts blamed lenders’ faulty loan practices during the peak of the housing market for the rising short sales in the state.

And the situation has become worst with the addition of rising unemployment rate.

So far, 46,000 people lost their jobs in Utah. Last month, seasonally adjusted jobless rate in the state jumped by 5.7 percent, representing an increase of 2.4 percent from the same month in 2008.

Industry experts said that Utah should take consolation on the fact that it is better off compared with other states in terms of foreclose property and unemployment rates. In the first six months of this year, one out of 69 homeowners received at least one foreclosure filing, earning Utah the 5th position on the list of states nationwide with high foreclosure rates.Utah’s foreclosure rate for the period rose by 88 percent, compared with the first six months the previous year.

The number of foreclosure filings nationwide rose by 9.5 percent from January to June of this year, representing a 15 percent rise from the same period last year. Jeff Thredgold, chief economist at Zions Bank, said that with the way foreclosure rate keeps on rising, it is not surprising to see property values dropping and short sales increasing.

Experts said that cities with high number of foreclose properties are also leading the list of areas with high rate of short sales and unemployment and declining property values.

Related Posts:

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• Foreclosure Listing Growth Pushed Down Home Values
• Repossessed Homes Short Sales on the Rise in California
• Unemployment Drove Foreclosed Properties to Rise in Nevada