End of York PA Housing Crisis: I Don't Think So?

Earlier this year, as many as half of all transactions nationally were resales of foreclosed properties, largely at low prices. Since then, so-called normal sales (those not involving distressed or foreclosed properties) have risen while foreclosure sales have remained stable. This improved mix — together with cheap financing and a couple of popular tax incentives — helped to revive prices in some hard-hit areas. As such, the media has eaten this up and can't help themselves but proclaim the recession is coming to a close. But they are wrong!

You see...with schools opening up again and the summer home-selling season winding down, sales by nondistressed sellers are likely to fall in coming months. In addition, the slight increase in prices of home's sold is nearing it's end because of the expiration of popular housing subsidies. For example, the $8,000 federal tax credit for first-time home buyers in York PA along with across the nation is due to expire in December.

Another concern is that the housing problems appear to be spreading well beyond the questionable borrowers who were at the center of the first stage of the financial crisis - subprime borrowers. Now, 'prime fixed-rate mortgages' account for about a third of foreclosure starts, according to the Mortgage Bankers Association.

In addition, the pace of foreclosures could soon accelerate as mortgage servicers catch up on foreclosures they have delayed because they were too busy dealing with new mortgage modification guidelines. Truth is, I wouldn't complain too much about this, because it would increase the foreclosure sales in York PA, thus pushing prices down even further. Prime picking for the savvy investor.