Bankruptcies Soaring as a Result of Housing Market Crash
April 17th, 2008 by 
admin
The month of March saw a huge increase in bankruptcies and bankruptcy filings nationwide, sparking further concern that the economy is in a recession brought on largely by the slump in the housing market.
With more than 90,000 bankruptcies filed in March, the month held a rate that was 30% above the average pace of 2007. Bankruptcies have been linked to the upward trend in home foreclosures, as homeowners who cannot afford to keep up with the soaring interest rates of sub prime and adjustable rate mortgages often declare bankruptcy when faced with a significant default. The prime evidence for this comes in the fact that the three states with the highest rates of bankruptcies, Nevada, California and Florida are also the states with the highest rates of foreclosure.
The rising incidence of bankruptcies in these states indicates similar trends that the rise in foreclosures illustrate, namely that people are losing significant amounts of money on real estate investments due to the housing market fallout. In fact, California, Nevada and Florida are also states that were rampantly developed during the housing boom before the fallout, and many of the properties ending up at auction are new developments that investors were simply unable to sell. Interestingly, this means that there are a lot of newer properties on the foreclosure market, which is contributing to the growing trend among homebuyers to buy discount foreclosure and bankruptcy properties. The values offered by newly built, quality homes at discount prices are pretty much unparalleled in the current market.
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3 Comments »
April 18th, 2008 at 9:06 pm
[...] Bankruptcies Soaring as a Result of Housing Market Crash The month of March saw a huge increase in bankruptcies and bankruptcy filings nationwide, sparking further concern that the economy is in a recession brought on largely by the slump in the housing market. [...]
April 24th, 2008 at 1:25 pm
[...] Bankruptcies Soaring as a Result of Housing Market Crash The month of March saw a huge increase in bankruptcies and bankruptcy filings nationwide, sparking further concern that the economy is in a recession brought on largely by the slump in the housing market. [...]
May 12th, 2008 at 9:34 am
[...] bankruptcy, as new reports indicate that the state ranked 2nd in the nation with just shy of 13,000 bankruptcies registered during the first quarter. The only state with more bankruptcies was [...]