Foreclosure Wave Crashes into Smaller Cities

By now, it seems common to read about the foreclosure crisis affecting major metropolitan areas, such as Las Vegas, Detroit or Southern California. But as those areas begin to recover from (or at least cope with) their current economic state, foreclosures are apparently spreading to smaller cities throughout the country.

According to an article on CNN, these are the five cities with the fastest-growing foreclosure rates since the second quarter of 2009:

  1. McAllen, Texas: With a foreclosure rate of 1 in 251 homes, this border town has a quarter-over-quarter increase in foreclosures of 1,197%. With unemployment over 11% and many homeowners facing resetting ARMs, local Realtor Association president Dick Henry worries that things may get worse before they get better.
  2. Burlington, Vt.: Foreclosures in Burlington may have quadrupled in the third quarter, but the 400% increase may just indicate how healthy the city’s foreclosure rate has been. That rate is now at 1 in 4,436 homes—much better than the 1-in-136 national rate.
  3. Lincoln, Neb.: in the Cornhusker state Capital, many state and federal employees have had their hours or jobs cut, creating a 240% increase in foreclosures. One in 2,417 homes went into foreclosure in the third quarter, and nearly 40% of 2009 home sales have been foreclosures, according to local real estate agent Cheryl Duval.
  4. Gulfport-Biloxi, Miss.: Following Hurricane Katrina in 2005, Mississippi’s Gulf coast saw an influx in home sales. Four years later, many of those same homes are going into foreclosure. One in 492 homes was in foreclosure in the third quarter, a 140% increase.
  5. Sioux Falls, S.D.: Calling itself the “Best Little City in America,” Sioux Falls’ 116% jump in foreclosures may just be a result of so few home being in foreclosure earlier in the year. In all, 1 in 492 homes had a foreclosure action; the unemployment rate is low at 4.6%, and since the housing market didn’t boom like it did on the coasts, there hasn’t been much of a burst, either.
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