Million-Dollar Foreclosures Rise as Rich Walk Away
February 23rd, 2012
Five years after the housing bubble burst, America’s wealthiest families are now losing their homes to foreclosure at a faster rate than the rest of the country — and many of them are doing so voluntarily.
Over 36,000 homes valued at $1 million or more were foreclosed on — or at least served with a notice of default — in 2011, according to data compiled by RealtyTrac, which tracks foreclosures. While that’s less than 2% of all foreclosures nationwide, it represents a much bigger share of foreclosure activity than in previous years.
“These properties are accounting for a bigger piece of the foreclosure pie,” said Daren Blomquist, vice president of RealtyTrac.
Out of all foreclosure activity, the share of foreclosures on properties valued at $1 million or more has risen by 115% since 2007 while the share of multi-million dollar foreclosures — or homes valued at more than $2 million — jumped by 273%. Meanwhile, the share of foreclosures on mid-range properties valued between $500,000 and $1 million fell by 21%.
Until recently, many homeowners at the high end of the housing market were able to postpone the foreclosure process, Blomquist explained. With other assets and alternatives, “they had more financial means to hold out against default.”