Foreclosure rates have been at historic highs since the bursting of the real estate bubble several years ago. The market has been left extremely volatile, and no better indicator of this is the recent national increase in gas prices. While there are certainly other factors that attribute to the delinquency of mortgage payments, unexpected burdens such as these can magnify current market conditions. Trouble in oil rich countries like Libya and Egypt has forced barrel prices over 100 dollars and these costs have translated into economic trouble for millions of middle class families.

Homestead, Florida has among the highest foreclosure rates in the country, and one of the major factors may be its distance from major hubs of employment like Miami. As cited in the Wall Street Journal, some residents of this town are now forced to spend up to $100 a week on gas thus increasing constraints on other areas of investment, namely their homes. A Chicago based non-profit organization has estimated that half of the income of families in Homestead is spent towards housing and transportation. These trends may also have a direct connection with the amount of vacancies. As established, length of commute has become an increasing area of concern. This makes towns considered outside the direct suburban area of major cities far less attractive to home-buyers. The opportunity to purchase a larger residence may be forfeited in the interest of future costs such as the monthly expenditures towards transportation. Values of these homes will also maintain their value over time as the wide-sweeping necessity to be in close proximity to a city rarely falters. 

With few options left, more families are being forced to sell their homes at below purchase cost and find better economic opportunities elsewhere. With rising distress in these faltering communities, one must ultimately ask what can be done to save them. Seemingly, one of the few options we have is to resort back to the fundamentals of American entrepreneurism. Local governments could make their towns attractive to new investors and bring jobs to areas that have been vacant for so long. Efforts should be focused on bringing business in by making their communities more attractive to potential investors. Cash strapped administrations may feel the burden of these expenditures now, though long term benefits would far exceed present costs. Possibilities could range from decreasing taxes on land and relaxing zoning restrictions to simply advertising the tangible benefits of the locale (fertile soil, market demographics). Land is often the biggest asset of local municipalities, and how it is used is often the largest correlation towards its’ economic success and failure. Offering vacant parcels to potential commercial investors could ultimately increase employment, shorten commute times and most importantly, soften rates of foreclosure. In a time of great turmoil for places like Homestead, Florida, decisions made today are essential in shaping an optimistic future.   

Originally from Condo.com – Condo News