Dramatic Increase in The number of Wisconsin Repo Homes

Dec 9, 2008 | Filed under Repo Homes | Comments (1)

The principal trading base for Wisconsin has historically been farming and in particular dairy farming. The lumber trade along with mining have also proven profitable over the years. The state is also heavily reliant on the tourism brought in by the beautiful coastline along the shores of Lake Michigan. Development over the last twenty years has seen an increased emphasis on service industries such as medicine and education, which have taken over manufacturing and farming as the largest emplyers.

In order to better understand why there has been such a dramatic increase in the number of Wisconsin repo homes, we must look at the economy in more detail. The state is second only to California in terms of the production of diary related produce and the global credit squeeze and recession have seen leaps in the prices of food and fuel over the past twelve months. Major supermarket chains such as Wal-Mart have not decreased their profit margins significantly in relation to this effect, but they have reduced the amount they pay the farmers for the produce. So unemployment in farming has increased but not as dramatically as the reduction in wages and profit for dairy farming.

The service industries and tourism have undoubtedly been hit hard b the financial crisis, resulting job losses and the inevitable repossessions that follow. Wisconsin unemployment figures have risen above the national 6.1% to 8.9% in Michigan this month. This will only add to the suffering of those people trying to maintain sub-prime mortgage payments that looked like such a good deal only a year or two ago.

There are over 7,000 foreclosures in the state at present, some of the highest figures in the country. Closely linked to this figure is the high number of associated bankruptcies, the figure for September being 3,500. There is almost no new real estate being developed as there are no buyers either willing to buy at such a time of low confidence in the markets, or people do not have the cash deposits and certainly do not have the ability to pay the high mortgage rates.

The industry of ‘foreclosure auctions’ is on the increase at present with repo homes being offered at 20-50% reductions on their value this time last year. The deals look excellent, but this is an environment where cash is king and uncertainty over shifting interest rates and the reliability of banks is high. The number of Wisconsin repo homes will continue to rise for the coming months as even the government’s recently announced bank bail out package will not settle the markets immediately.