National housing slump hits home
Posted October 23, 2008
Raleigh, N.C. — Foreclosure numbers indicate that the effect of the national housing slump, created by crises in mortgage and credit markets, might be easing in the Triangle. But those dependent on the housing industry for their livelihood said national woes are still hurting them.
Analysis firm RealtyTrac reported Thursday that home foreclosures fell from August to September by 46 percent statewide and by 16.9 percent in the Raleigh-Cary metropolitan area. Less than 1 percent of all Raleigh-Cary properties were involved in a foreclosure.
Despite the improvement in raw numbers, however, the local foreclosure rate is 18.9 percent higher than a year ago.
Wake County Sheriff Donnie Harrison said that his deputies delivered 1,074 foreclosure notices in September – a 41 percent increase from August. Fulfilling that legal obligation keeps deputies "busy all the time," Harrison said.
"We don't like to do it, but it's our job," Harrison said. "Anytime you're displacing somebody, it's not a pleasant task. But we have to do that because it's a court order."
Banking experts warned that one's month change should not be taken as a trend.
"I don't place too much stock in what happens from one month to the next," said Mark Pearce, state Deputy Commissioner of Banks.
It could be a good time for potential buyers to get into the market, though, he said.
"In this environment, banks and investors don't really want to go to foreclosure. And, so if there's ever a time to have an opportunity to work a loan out, right now's the time," Pearce said.
While foreclosures continue to mount on the market, the demand for new housing has come down, threatening the livelihood of those whose jobs are tied to the industry. In Wake County, building permits for new home were on track to be down about 30 percent from 2007, according to the Homebuilders' Association of Raleigh-Wake County.
Custom homebuilder Richard Gaylord said that a slowing market has forced him to cut both production and staff by half.
"Normally, our company builds about 25 houses a year, and we have had to pull back dramatically," Gaylord said.
Russell Swann said that most of the windows he makes at Silver Line have not ended up going into new homes.
"There just ain't nobody buying them. They're just sitting there," Swann said.
Silver Line will close its Durham plant, laying off 428 employees by Dec. 20. The New Jersey-based company is a subsidiary of Andersen Corp., the world's largest manufacturer of windows and doors.
Stock Building plans to lay off a quarter of its 12,000-strong work force but has not decided how many of its 1,100 North Carolina employees will be cut. The company is part of the Europe-based Wolseley.
Such scenarios – of large, national or international firms cutting local jobs – can be expected to continue, builders said, because North Carolina's housing market is not immune to national economic woes.
"Clearly, some of these companies are national companies, and so they're impacted not just by the Triangle but other marketplaces, and so they have to make business decisions for their companies," said Tom Minton, with the homebuilders' association.
In the meantime, Swann said, he has started to go to job fairs. "And whatever they've got, I'll take it," he said.
(Help for North Carolinians facing foreclosure is available at www.ncforeclosurehelp.org or by calling 1-888-995-HOPE.)