Foreclosures and struggling economy

The Republic is reporting that 40% of Mesa's home sales are foreclosures. This is bad news for everyone because it brings down home values and will take years to recover from. As the story says, it starts with investors during the boom economy. They speculate and buy up houses bringing up the values of the houses around them. However, when the economy turns sour, the people either sell the houses for a loss or default on them, flooding the market with undervalued homes. This causes trouble for the people who have overextended themselves and are unable to sell their homes for what they need to make to get their loans covered.

The real story here is that foreclosures are on the rise from people actually losing their jobs. This is a trend that speaks a lot about the current economy and what the climate is going to look like for the next few years. Its one thing for a person to lose their investment property. Its another thing for them to lose their home.