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May 2, 2006
Foreclosures up dramatically in Houston
There are some disturbing signs in the Houston housing market including a foreclosure rate three times higher than it was in 2002.
Many are attributed to non-prime or sub-prime loans which are given to people that otherwise would not have qualified.
"We're worried about a phenomenon that began in the mid 1990's that is really exploding," said economist Barton Smith.
He said sub-prime mortgages have a foreclosure rate of six percent compared to one percent for prime mortgages.
Smith said these high-risk homeowners are "squeezing into a market that has a lot of risk right now."
Smith said foreclosed homes normally sale for less than others in the neighborhood which can eventually drive down all prices in areas with many foreclosures.
Map showing neighborhoods with the most foreclosures
The red dots signify foreclosures of 15 percent or more sales. The blue dots indicate 10 percent to 15 percent.
Posted by Michelle Homer at May 2, 2006 4:54 PM