Thursday, May 22, 2008

Foreclosure Hotspot

The Wall Street Journal finds foreclosure hotspot in Colorado along I-25 and I-70 corridor. The thesis attributes the causes to not only the buyer behaviors but also the builder's bet that people would be willing to live far away from where they work if they can afford their independent house.

Many of these homebuyers are underwater not just because they bought more house than their incomes could support, and not just because prices are falling. They were also betting on commute patterns and demographic expectations that are proving invalid.

These were bets on location, location, location – premised on the idea that people would be willing to live hours from anywhere for a chance to own a single-family home they could actually afford.

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