The Midwest is seeing high foreclosure rates because people got loans they couldn’t afford. As interest rates increased, their adjustable loans became unaffordable. Flat wages and higher living costs are keeping buyers on the sidelines. A seller in Omaha, NE was on that city’s TV news, lamenting that not a single showing had occured in several weeks. This was so noteworthy, it made the news. The problem in Omaha, as in most of the country EXCEPT So CA, is overbuilding. Buyers have more choice, builders are giving away incentives. This is happening in Omaha. One of the 2 big builders in Omaha committed suicide in March due to his financial problems – he had 2 sets of financing from 2 banks; the banks did not run a title search…
Overbuilding, higher living costs, flat wages, and exotic loans are causing foreclosures nationwide.
What I hope everybody here realizes is that every property in this country is vulnerable to price drops, EVEN THOSE THAT JUST ROSE WITH INFLATION.
Prices in Omaha, NE have been rising with inflation for decades, not more than that. Yet inventory and foreclosures are rising and sales are down. Price drops will be next.
Omaha’s economy is very healthy, so there is not a problem with job loss causing any of this. They do have a lot of jobs that were added in construction, lending, and real estate, but my recent post about their job sector shows they are much more healthy than our SD economy. Even in Omaha, there is “a mortgage lender on every corner”, according to my friend who is a bookkeeper for 33 builders and realtors in Omaha.
