News-Letter

Media Credit: Daniel Utwin Baltimore has started to feel the weakening of the housing market that is felt throughout the nation.

The implosion of the nation's housing market and the resetting of sub-prime mortgage rates have hit Baltimore hard, resulting in 1,199 foreclosures so far for 2008, a number on track to exceed last year's figures of 3,090 and grow upwards of 4,000.

While current foreclosures numbers do not exceed those in the early part of the decade - in both 2000 and 2001 the there were over 5,000 in Baltimore - the recent increase in foreclosures comes after a period of several years, which saw these numbers decreasing.

Experts are confident that Baltimore will continue to weather the storm better than other mid-sized cities. Mathew Kachura, of University of Baltimore's Neighborhood Indicators Alliance, said that because Baltimore continues to undergo the painful transition from an industrial to primarily service-based economy - according to data compiled by the Baltimore Metropolitan Council.

Though the city saw a 20 percent decline in its manufacturing sector from 2002 to 2004, residents reliant on service jobs do not necessarily feel the bite of a retracting economy at the same rate that workers in manufacturing centers like Detroit and Cleveland do.

Kachura felt that this makes Baltimore's foreclosure rate "several years behind [the] national curve, which is also true for [the] economy."

More affluent neighborhoods, such as Charles Village, have thus far largely escaped high foreclosure rates. Kachura explained that this is mainly because the demographics of the community are not the same as those that were more likely to be given sub-prime loans.

"Thus far foreclosures have not hit emerging, gentrifying neighborhoods, where fewer properties are investor owned," Kahura said.

Anne Balcer-Norton, director of foreclosure prevention for St. Ambrose Housing Aid Center predicted that as those with traditional mortgages feel the pinch of a slowing economy, this could change.

"Communities that have never [been] affected are being affected [by foreclosure problems], communities like Canton. At this point, all demographics and income levels are being affected," she said.

The boom in the national economy, which has begun to deflate over the last two years, did enable many Baltimoreans to partake in the American dream of home ownership. Skyrocketing housing prices allowed others to borrow large sums of money based on the then market value of their homes. Lenders offered adjustable rate mortgage and refinancing to borrowers with so-called sub-prime credit rating.

Continued...

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