Foreclosure statistics - Who are They?

Have you wondered why so many homeowners become foreclosure statistics? If you think it was primarily because consumers were outwitted by lenders, you might want to think again. Research at the University of Arkansas shows outwitting by lenders was not the main stream.

The U AK study shows that most foreclosures were in affluent and educated households with lower numbers of children in geographic areas that had experienced very rapid real estate acceleration. Research divided households into 21 life stage groups to determine which groups experienced the most foreclosures.

The group with the most foreclosures were affluent adults born between mid 60's and early 70's. This group had aggresive investors. The group that experienced the highest number of foreclosures may have the best consumer protection laws, given their education and background. More creative policy implications may be needed based on this research.

Complicated Thought Patterns of Buyers & Sellers

In this time of uncertainty in the financial industry and housing markets, undertand how buyers and sellers think is important. According to Wendy Cole in the September 2008 issue of Realtor magazine, buyers and sellers can appear whimsical and irrational in some of their decision making.

How do we determine what buyers and sellers really want?

According to Cole, "the potential for misunderstanding and mistrust is enormous." Perceptions of what the other person is thinking can be off. Cole notes a professor of behavioral economics at Carnegie Mellon has stated that buyers have an attachment and feel they "own" the home once they have made an offer. This realization should help calm sellers' anxiousness about a buyer's commitment, even in times of uncertainty.

But buyers can be overconfident about whay they know according to Jason Zweig, colulmnist for The Wall Street Journal. According to Zweig, most buyers don't have an answer to the question of "When is the right time to buy?" if asked; but they may be convinced prices will drop further. People fear losing money, and that's rational. Sellers, on the other hand, may become more distressed about a fall in the value of their home than they are in a drop in the value of their stock.

Warning buyers and sellers about what to expect (i.e., a wall of paperwork at closing) can be a smart move to keep perceptions on track. Rather than being frightened off, consumers appreciate honesty in sales people. And that's why this Realtor is determined to keep communication open and honest with her customers and clients. You can bet on it!