It’s not what you would guess, but there it is: according to CNNMoney, the firm that keeps track of foreclosures has reported that the foreclosures on million dollar properties is growing while foreclosures for midrange properties are beginning to drop.
It’s been five years since the housing market began its precipitous drop. During that time, overall growth in foreclosures has been front and center for headline writers in Santa Barbara and throughout the rest of the nation. But only now are foreclosures among some of the nation’s wealthiest homeowners drawing attention. The foreclosure rate is rapidly increasing in this group --and at a faster rate than for the rest of the United States.
Surprising also is that many of these wealthy families are doing so voluntarily.
RealtyTrac is the firm quoted by CNNMoney. Its data show that last year upwards of 36,000 homes valued at $1,000,000 or more were foreclosed upon or served with a notice of foreclosure (default). Even though that is fewer than 2% of all foreclosures nationwide, it still represents a greater number of foreclosures than seen in earlier years. For wealthier homeowners who actually could continue to make mortgage payments but decide not to, it can be a business decision. Financial experts call such foreclosures “strategic defaults.”
RealtyTrac also found that the number of foreclosures on properties valued at $1 million or more has risen by 115% in the last five years, and twice as fast for those worth more than $2 million. However, among mid-range homes – those valued between $500,000 and $1 million -- foreclosures actually dropped by 21% during the same period.
It seems that the Santa Barbara housing crisis may be ending from the bottom up, with borrowers who purchased lower-cost homes now beginning to emerge from the storm, even as some of the wealthier families (admittedly a very small percentage of them) go through the same trial.
The silver lining? If you are looking to buy a home in the $1,000,000+ range, now could be your window to snag a once-in-a-lifetime value! Let us know if you would like to see a complete picture of all the Santa Barbara properties for sale this March.
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