The Top Foreclosure Cities in the United States

Foreclosures have become a common topic in the news over the last few years due to a huge dip in the real estate market. Unfortunately some cities are being affected more heavily than others. There are a variety of different reasons why some cities are being hit more than others.

This may have to do with real estate prices and interest rates low enough to allow atypical individuals the opportunity to purchase a home, but rising interest rates have escalated their monthly mortgage. It may also be related to other economic issues within a city, such as a large unemployment rate. Whatever the reason, foreclosures have definitely been on the rise in certain cities and parts of the country in the past few years.

Just because a city has a large foreclosure rate, does not mean a potential homeowner should stay away from purchasing a home in this city. On the contrary, this is a great place and time to buy a foreclosure, as potential homeowners will be able to get a good deal on a home they may otherwise be unable to afford.

Here are some of, but not all, the top foreclosure cities in the United States and the reasons why:

Las Vegas, Nevada

Las Vegas has been at the top of most foreclosure lists for the past year or two. This is mostly caused by a boom in the building and real estate industries in Las Vegas earlier in the decade when the real estate industry had low interest rates and affordable mortgages. Many properties were purchased at a price that the owner can’t sell it for in today’s market. Eight out of ten zip codes surrounding Las Vegas have been on the state of Nevada’s top list, with North Las Vegas topping the list with 741 foreclosure filings in December 2007 alone.

Miami, Florida

The real estate market in Miami has seen a pattern similar to that in Las Vegas; a huge boom a few years back with a big crash in the last few years. Many homeowners purchased when the market was hot and the interest rates were low and they can no longer afford rising mortgage interest rates and mortgage payments. The median home price in Miami was $349,00 at the end of 2006 and has taken a sharp nose dive in 2007-2008.

Detroit, Michigan

Although things have begun to improve in Detroit’s real estate industry, this city still tops most real estate foreclosure lists. Some experts estimate that at its foreclosure height in 2006-2007 there were as many as 160 foreclosures for every 100,000 residents in Wayne County, the county housing Detroit. There is no doubt that the main reason for the high rate of foreclosures is because of a downturn in the city’s economy.

Dallas-Ft. Worth, Texas

The problem in Dallas-Ft. Worth comes from lenient building regulations that have allowed builders to continue adding new developments while a large number of older homes remain on the market without being purchased. Another problem is that property taxes in the area continue to rise as the economy heats up and the area becomes more populated. At the end of 2006, there were approximately 4,500 active foreclosures between the two counties, with the average home sale between $125,000-$160,000.

Houston

Houston is in a similar situation as Dallas and Ft. Worth. Because of a huge boom in the building and real estate industries in the past few years, with lax building regulations, the real estate market has become saturated with homes. New homes are still being built, while older homes sit empty or end up in foreclosure because owners cannot sell them.