By Julie Thompson
 A new study conducted by the University of Virginia is providing fresh information about foreclosures in the 50 states, 35 metro regions and 236 counties. It seems that some analysts have exaggerated the severity of the fall in housing prices and increase in foreclosures. The study has been conducted by Professor William Lucy and Jeff Herlitz, a graduate student.
The study indicates that the maximum concentration of foreclosures have been in California, Florida, Nevada and Arizona. There has been modest numbers in metropolitan counties and in some other states. The study states, “66 percent of potential housing value losses in 2008 and subsequent years may be in California, with another 21 percent in Florida, Nevada and Arizona, for a total of 87 percent of national declines. California had only 10 percent of the nation's housing units, but it had 34 percent of foreclosures in 2008.”
California was exposed the harshest to the foreclosure crisis because the median worth of houses that were occupied by owners in 2007 was 8.3 times
the median family earnings. But in 2007 the national average was a mere 3.2 times more than the median family earning. In 2000 it was even lower at 2.4 times.
Another weak zone was Los Angeles metro region where 20% of those with house mortgages in each of the counties were contributing 50% of their earnings to costs related to housing.
In all the 50 states the potential loss in the worth of houses was below one third of the $350 billion that had been sanctioned to the banks and insurance firms to enable them to manage the losses they had incurred from securities backed by real estate mortgages. According to Lucy and Herlitz “Damage to the balance sheets of large banks and AIG occurred not mainly from losses on foreclosed residential mortgages, but because of borrowing short-range to buy long-range derivatives and from selling credit default swaps insuring derivatives backed by mortgage payments.”
In the central cities the numbers of foreclosures were lower in comparison to the numbers in suburban counties.
According to the researchers demography has played a significant part in foreclosure numbers. The bulk of the owners usually come from the 30 to 44 age group. In recent years their numbers have been declining. These are the peak years for rearing children but with a fall in numbers the demand too has declined causing excess housing units in some places.
Julie Thompson, has been working on foreclosure1.com studying the foreclosures market, helping buyers on the finer points of California Foreclosure Listings . Try to visit foreclosure1.com and find all related information about Bank Foreclosures.
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