Real Estate

Drop In Number Of Minnesota Foreclosures Signals End Of The Recession

The rate of Minnesota foreclosures dropped 12 percent in 2009. Economists claim that this is an indication of an end to the recession. There was a total of 23.019 foreclosures in Minnesota in 2009. This is 1.28 percent of all the residential property in the state. While this may seem like a high number, it is less than 2008. Clearly, the trend is heading in the right direction. When pending federal tax programs are considered there is reason for optimism for the Minnesota real estate market.

The federal mortgage modification program and the federal government’s purchase of mortgage-backed securities are the primary cause in the decrease in the foreclosure rate. Mortgage payments can be reduced up to 30 percent of a homeowner’s income under the mortgage modification program. The mortgage modification program is scheduled to end in 2010. Without the cushion of this program, foreclosure rates could increase again.

The high rate of unemployment is the main cause of the foreclosure problem in Minnesota. Initially the foreclosure increase was mainly in the urban twin cities area which was hit hard by job losses in manufacturing jobs. The rural regions, whose economy depend more on farming and tourism, was not impacted. Now these rural areas are experiencing increased levels of unemployment. They actually had an increase in foreclosures in 2009.

The tax credit for home buyers has also assisted in reducing foreclosure rates in 2009. This program provided a $8,000 tax credit for first time home buyers. This program also helped those who were behind in their mortgage payments by making it easier for them to sell their home before defaulting on their mortgage. Extension of this program would keep the market moving in this positive direction.

Pending congressional legislation is raising hopes that the worst is over. A tax credit for hiring and creating jobs will lower unemployment. An improved labor market will ripple through the entire economy. More community banks would help loosen up credit and stimulate new investment in small business and hiring. These trends are cause for cautious optimism.

There is a good chance that Congress will further extend the first time buyers program and create more credits to boost the real estate market. This would be a positive sign. Government must do all that it can to create jobs and bring liquidity to the real estate market. There have been some hopeful signs recently.

Low housing prices will attract investors. Eventually they will bid housing prices up to revive the real estate market. As housing prices begin to turn around and credit becomes available the real estate market will begin to improve. The low housing prices will attract buyers. The market should begin to revive as the labor market improves and prices stabilize.

As we enter this final stage of the liquidity cycle we will see an improvement in the rate of Minnesota foreclosures. After this election cycle it will be easier for Congress to pass stimulus legislation and deficit spending that will boost the economy including the real estate market. We have good reasons to be optimistic.

When you want information that regards foreclosure in Minnesota, try using the Internet as your search. Tons of mn foreclosures can be helped if you find the correct information. So, don’t let you get a mn foreclosure happen to you without getting help.

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