Foreclosures in Vermont: Explaining the Numbers in a Rational Way

Numbers are an interesting thing. They can give the person looking at them a snapshot of reality but they seldom tell the entire story. The number is usually more than a synopsis than a review.

Take for examples the foreclosure numbers in the state of Vermont. The number of homes in foreclosure increased 32.81% while the average price of homes in foreclosure decreased 2.88%. At first glance that is a dismal set of numbers that seem to tell of foreboding doom and gloom.

In reality it’s fairly easy to explain those numbers in a rational manner. Let’s look at the numbers individually first so we can understand the meaning.

The number of increased 32.81%. What that means is that more homes fell into the foreclosure market and the total increased that percentage. That is due to the fact that the laws in that state mandate that the foreclosure process take an average of 210 days to complete. So most of the homes that are adding to that total were entering foreclosure back in March or April. That is not a reflection of today but rather a reflection of conditions back in the spring of 2009.

The average price of homes in foreclosure decreased 2.88%. This number is a direct result of the number of homes entering the market. It is a prime example of the theory of supply and demand. If there is more of something available, the price of that commodity drops to reflect the amount of items on the market.

So, while the news is far from being good. It is easy to explain the numbers and given the circumstances, they are not that far out of line with the market and it is a trend that will likely continue for a while given the state of foreclosures earlier in the year.

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