With fewer U.S. homeowners being foreclosed on, consumer spending could pickup, which might lead to additional business at small retailers across the country.
As these companies see more customers, the risk of an incident that leads to a significant lawsuit could increase. For this reason, small retailers may want to consider purchasing additional liability insurance to ensure they are protected if a customer slips and falls on store property.
According to CoreLogic’s April National Foreclosure Report, there were 52,000 completed foreclosures in the first month of the second quarter, down from 62,000 a year ago at the same time.
Additionally, the national foreclosure inventory fell from 1.5 million homes in April 2012 to 1.1 million homes, a 24 percent year-over-year decrease.
“The shadow of foreclosure and distress continues to fade, with the annualized sum of completed foreclosures having declined for 17 straight months,” said Dr. Mark Fleming, chief economist for CoreLogic. “Six states have year-over-year declines in the foreclosure inventory of more than 40 percent, and in Arizona and California the year-over-year decline is more than 50 percent.”
Increasing home prices helping many avoid foreclosure
Rising home prices are one of the main factors behind fewer U.S. homeowners facing foreclosure, and prices continued to jump in the first quarter.
All three composites in the Standard and Poor’s/Case-Shiller Home Price Indices showed improvement in the first three months of the year. The 10- and 20-city composites increased 10.3 percent and 10.9 percent respectively, while the national composite was up 10.2 percent in the same period.
“Home prices continued to climb,” says David Blitzer, chairman of the index committee at S&P Dow Jones Indices. “Home prices in all 20 cities posted annual gains for the third month in a row.”
The Phoenix area showed the largest gain at 22.5 percent, followed closely by San Francisco at 22.2 percent and Las Vegas at 20.6 percent. New York, Cleveland and Boston had the weakest first quarter, but all three still had positive appreciation.
Should these improvements continue, sales at U.S. retailers could pickup in the near future. With more customers on store premises, the risk that an incident could occur leading to a lawsuit increases significantly.
To ensure they have the proper protections in place, small business owners will want to look over their liability insurance policies to see if they have enough coverage available to defend against a lawsuit.
