Michigan’s improving real estate market could actually lead to a new round of home foreclosures.
Michigan’s home foreclosure rate has been falling for the past few years. That's partly because banks were more interested in short sales. That's selling a home for less than what's owed on the mortgage.
Now Michigan’s real estate market is improving, with better prices and more interested buyers.
Daren Bloomquist is with Realty Trac. He says short sales started tumbling in Michigan during the first quarter of the year.
“Rising home prices are giving homeowners less motivation to do short sales….which is probably fine,” says Bloomquist, “But rising home prices could also be giving motivation to banks to not approve short sales.”
Bloomquist says banks may once again see foreclosure as a more viable option and that could lead to more home foreclosures in Michigan this fall.
“That would be an ironic twist…to see an increase in foreclosures when the market is clearly passed the bottom and clearly improving,” says Bloomquist, “But I do think that’s a possibility.”