Foreclosures spike, means bad news for 1st time buyers

Foreclosures spike, means bad news for 1st time buyers »Play Video
TRI-CITIES, Wash. - It won't crumble our local market. But the latest foreclosure rates will take out a large chunk of buyers as well as drop the value of homes.

"Pretty much knocks the first time buyers out of the game for those because they need too much money to put into them," said realtor Tracy Phillips.

Local realtors say that the buying advantage goes to a select group. Those looking to flip houses or rent out homes. With foreclosures up, banks are less likely to lend. But it's still not easy.

"Doesn't matter first time or not, it's harder to qualify for a home," said Phillips.

This last year February saw nearly double the foreclosure rates of last year. The state percentage increased almost a full percent. All while the national rate dropped below three percent.

Frank Schmeck has felt that speed bump. He lives in Kennewick off Edison. It's on the same street as that foreclosed home.

"I wish it could get better, I would like to sell my house or leave it to my kids to have something worth value," said homeowner Frank Schmeck.

Frank even had his home appraised recently.

"They said it just wouldn't sell because of the way the neighborhood was," said Schmeck.

Realtors say their inventory is low and banks are backed up with foreclosed homes. So people like Frank can only hope for a turn around.

"Makes me feel kind of let down, when I came here I had great aspirations and the work I did to leave something for my family, but I wish something would be done, but what can I do," said Schmeck.

When inventory is low it becomes a seller's market. Realtors expect up to an eight percent increase in new construction by the fall.