North Carolina Foreclosures More than Double in 2007
February 14th, 2008 by 
Joseph Smith
North Carolina foreclosures soared to new heights in 2007, making them one of the states with the highest jumps in foreclosure rate in the past year. During the period between November 2006 and November 2007, the amount of North Carolina foreclosure homes rose over 143%, which is a staggering figure, even for the foreclosure plagued southeastern region. The state still fares better than the national average however, which stands at about 1 foreclosure per 600 households. North Carolina averages roughly 1 foreclosure for every 1000 households.
But what’s really interesting about this jump in North Carolina home foreclosures is that despite having a booming state economy and a steady influx of new residents and jobs over the past few years, the number of defaults and subsequent foreclosures in the state is still growing.
Usually, a spike in foreclosed homes can be attributed to things like a sluggish economy or a high unemployment rate, but in a case like North Carolina’s, it really becomes apparent how much damage the proliferation of adjustable rate mortgages has done. ARMs and their sudden popularity during the real estate boom of the earlier half of the decade have been blamed by professionals all over the country as the main source behind the foreclosure real estate crisis sweeping the nation. North Carolina seems to prove this correct.
Before the market took a turn, many investors and homebuyers saw that North Carolina was attracting new residents, industry and jobs, and trying to capitalize on the soaring housing market, bought up lots of the state’s in-demand properties. Many of these investors bought these houses using adjustable rate loans, in hopes of flipping them quickly. Still more homebuyers bought their new houses through sub-prime loans, offering big discounts, but unfortunately carrying high monthly payments. However, once these loans adjust, investors and homeowners alike find it very difficult to keep up with the payments. As the market slowed, and properties values fell, it became difficult to sell them as well, and bank foreclosures or lender foreclosures became an inevitability, leading to lots of Durham foreclosures, Fayetteville foreclosures, Greensboro foreclosures and lots of other properties becoming available on the foreclosure market.
And this trend is primed to continue. Statistics show that during 2006, over 50,000 adjustable rate mortgages were purchased in North Carolina, most of them by sub prime borrowers. With many of these loans set to reset in 2008, experts are predicting another huge year for foreclosures houses in the state.
But for those interested in foreclosure investing, this could be an opportunity. Although the foreclosure rate may be high, North Carolina is still a very desirable location for many people, and continues to experience significant growth. Therefore, buying Charlotte foreclosures, Raleigh foreclosures or Winston-Salem foreclosures could be an excellent investment. Buying at foreclosure auction, banks or from government foreclosure agencies means getting a huge discount, sometimes up to 50% off market value. Turning around and selling these homes on the open market can reap huge rewards. Of course, it’s worth keeping an eye on the situation and waiting, as an increase in foreclosure inventory in North Carolina over the next year could drive prices even lower at auction.
