Regardless of the area of The Buckeye State from Columbus to Euclid, from Cleveland to Mansfield, from Toledo to Lakewood, from Akron to Cuyahoga Falls, from Dayton to Middletown, from Canton to Mentor, Parma to Kettering or Youngstown to Springfield or any small town in between, Ohio is similar to any state in the nation when it comes to foreclosures. Since the sub-prime mortgage crisis that started a global economic meltdown Ohio has suffered from homes that where over valued when every resident of the state could qualify for a mortgage.
Lending restrictions have been tightened over the past two years and qualifying for a mortgage in today's market is far more difficult causing homes to lose more value across the country. This depreciation which is beyond what anyone has seen in recent years is made all the worse by banks and lending institutions selling foreclosed homes at reduced prices in order to clear their books of the troubled assets.
Foreclosures are in no short supply in Ohio. The state ranks in the 10th in this dubious honor. The higher than average number of foreclosures is in large part due to Ohio's incredible success of decades of economic growth followed by a rapid reduction in commerce caused by a worldwide implosion of the economy. Ohio has been ranked in the number four slot for business climate as recently as 2009 and has a gross state product of $466 billion. Ohio has the seventh largest economy in the United States and has been ranked number ten for business friendly tax systems. These accolades will not vanquish with the down turn in the economy but will instead assist in leading Ohio out of the recent recession faster than the average state. Good news for real estate investors and homebuyers that qualify for a mortgage or pay cash for foreclosure homes.
The state has transformed from an agrarian and fur trading economy to a far more varied and robust economic engine which is exemplified by the fact that 59 of the top 1000 publicly traded companies are headquartered in Ohio. Companies as different from fur trading as Proctor and Gamble, Goodyear, AK Steel and many others have benefited from the workforce and overall population of the state. The current population of Ohio is over eleven million people, which ranks it as the seventh most populace state in the nation.
The citizens of Ohio have the 24th highest household income in the nation. Along with the revolutionary transition of the economy was the migration of the residents off of the farms and into the larger cities of the state. This transition has created a density of population that has the vast majority of residents living in the many metropolitan areas of the state. Wise investors will focus on the more densely populated areas as the likelihood of attracting a new buyer or tenant is made easier the higher the population.
Regardless of the causes of the migration to the major cities and suburbs the facts are that foreclosures in Ohio are on the rise and should be for the near future. Most experts agree that the foreclosure epidemic in the state was caused almost exclusively by the sub-prime mortgage market collapsing under its own weight and the repercussions will be felt through the next several years. This is made more evident by the fact that unemployment in Ohio has been hovering at the national average of just under 10 percent.
The states robust economy, although currently stalled should rebound faster than the national average but will require the subprime mortgages be purged from the system. The subprime mortgage meltdown being the primary reason the unemployment figure is as high as it is.
Until the subprime mortgages have been purged via refinance, sale or foreclosure, the number of foreclosures will continue at its current pace. Until such time wise investors in Ohio are looking at foreclosures as the best investment of our time. The real estate investment environment is unlike anything the residents in Ohio have seen before and should not be overlooked by both professional investors and homebuyers new to the market.
So what do you do if your home is not going to foreclosure in Ohio? You should be buying homes that have gone to foreclosure. Buying as many homes below market as your credit can withstand. Why buy in a down market? Buying in a down market instead of trying to time the market to purchase on the exact day that the market sees its lowest point will allow smart investors to buy more foreclosed homes and rent them out or selling before buying additional homes and repeating the process. Remember all of the people that lost their homes will still need a home to live in and provide their family shelter. This new real estate market is where the greatest boom in recent history for the state of Ohio will come from. If you are not in the game, get in the game.
Buying foreclosed homes in communities outside of metropolitan areas may require a degree of additional patience in order to locate a home with an adequate degree of equity. Once purchased the home will again require patience as resell buyers and tenants are more easily found in the more metropolitan areas and more difficult the more rural the area.
As the real estate market continues to reset itself and prices continue to adjust and mortgages also continue to adjust, more and more residents of Ohio will lose their homes by merely walking away from what appears to be an untenable financial position. If the average home in Ohio has lost 10 to 15 percent of its value then the average mortgage will take 5 additional years before it starts to build its first dollar of equity.
This negative equity position which many home owners find themselves in, sometimes referred to as "Being underwater" or "Upside down" on a mortgage is motivating more and more residents to stop paying their mortgage as the insult is exacerbated by injury when the mortgage rate is adjusted upwards and quickly becomes unaffordable.
Q. Foreclosure buying opportunities will continue as interest rates adjust on thousands of subprime mortgages that were taken on homes while downward pricing pressure eliminates the possibility of refinancing. Experts agree that this perfect storm of foreclosures will increase over the next several years. So what do you do to take advantage of the current real estate market regarding foreclosure?
A. Buy foreclosure homes now! Read more about how to buy foreclosures and educate yourself on the communities you are most interested in buying a foreclosure and start shopping here for the foreclosure home that meets your needs. If you are facing a pending foreclosure call a local real estate professional and determine what types of options you have. Your options will depend on your particular situation. Variables that are particular to Ohio include where a home is located, density of that areas population, which can vary greatly in Ohio, how much is owed on the home and how much the particular home is worth in today's market.
Q. Does the higher number of foreclosures mean that there are too many homes already for the population?
A. Perhaps in the short term. Ohio has been and will continue to be a destination for skilled, well paying jobs and innovations that are yet to be seen. Ohio has a very strong economic base. Residence will always need homes and a good investment today in a down market will result in a better upswing in the future.
Q. Has the average home in Ohio lost more of its value than in other places?
A. No, the entire housing market has seen a down turn in prices and Ohio is no different from every other state in that regard. The one difference is that Ohio is more diverse, is more educated and has a highly skilled workforce. This is all good news for the Foreclosure investor in The Buckeye State.
As for now the real estate market continues to improve an investment today will reap higher rewards in the near future. Recent government initiatives have also created an environment which has placed the majority of the blame for bad loans on banks and removed the financial stigma of being foreclosed on. Thus we will see more foreclosures until the employment improves nationally and locally. Buying foreclosure real estate now will prove to be an incredibly wise thing to have done in 18 to 24 months.