More forced sales

An increasing number of Danish homes are sold in forced sales, and economists expect that this trend will continue in 2010.
Seasonally adjusted, there were 479 forced sales in the first month of the year compared to 441 in December last year. New data from Statistics Denmark show that this corresponds to an increase of 9 per cent. Compared to January 2009, the actual number of forced sales has increased by 65 per cent.

»I am afraid that we must be prepared to see these forced sales in the Danish housing market for a longer period. During the housing boom a forced sale was a rare event, but the combination of housing price declines and increasing unemployment has changed this situation,« said chief economist Niels Rørholt at Jyske Bank..

The level is still below the level at the end of the 1980s and the beginning of the 1990s, some economists noted.
The number of forced sales will usually respond with a certain delay to the economic situation, chief economist Jes Asmussen, Handelsbanken, said.

Economist Las Olsen at Danske Bank noted that the average house owner still has a home-equity close to half the value of the home.
»They will thus easily be able to avoid a forced sale, even if the income declines. This is naturally a cold comfort for those who have bought a fully mortgaged house when the prices peaked and who cannot now repay the loans. But this means that we shall hardly again see a four-digit number of forced sales,« he wrote in a comment.