North Carolina, Raleigh-Cary foreclosure rates drop in September
Posted October 23, 2008 5:59 a.m. EDT
Updated October 23, 2008 1:54 p.m. EDT
Raleigh, N.C. — North Carolina’s housing market, especially in the Raleigh-Cary metropolitan area, improved sharply in September with home foreclosures dropping nearly 17 percent from August.
Real estate analysis firm RealtyTrac reported Thursday morning that home foreclosures also fell across North Carolina by 46 percent in September compared with the previous month. For the third quarter, foreclsoure activity was 16.7 percent lower than the second quarter this year.
The national housing picture also improved as foreclosure actions dropped 12 percent in September.
In Raleigh-Cary, foreclosure-related activities, ranging from notices of default to actual auctions, dropped to 1,279 last month. That total represents 0.31 percent of all properties, RealtyTrac reported. (Durham does not rank in the 100 largest metros as reported by RealtyTrac.)
Despite the improvement in raw numbers, however, the foreclosure rate is 18.9 percent higher than one year ago.
Charlotte’s market did not improve, with foreclosure actions increasing 8.2 percent from August to 3,162 or 0.47 percent of properties.
North Carolina, the nation’s 10th-largest state in terms of population, ranked 35th in foreclosure actions for September with 2,477. That breaks down to one in every 1,627 households.
For the third quarter, the Raleigh-Cary market foreclosure activity was 18.9 percent higher than a year ago, but 16.7 percent lower than the second quarter this year.
Nationwide, the foreclosure rate in the third quarter was 70 percent higher than in 2007. Nearly 766,000 homes received at least one foreclosure-related notice from July through September, up 71 percent from a year earlier.
By the end of the year, RealtyTrac expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.
That's bad news for anyone who lives nearby and wants to sell a home. While foreclosure sales are booming in many areas, those properties are commanding deep discounts and pulling down neighboring property values. "It has a pretty significant impact in terms of pricing," said Rick Sharga, RealtyTrac's vice president for marketing.
RealtyTrac monitors default notices, auction sale notices and bank repossessions. Lenders repossessed more than 250,000 properties nationwide in the third quarter, of which they took back 81,000 last month.
Six states – California, Florida, Arizona, Ohio, Michigan and Nevada – accounted for more than 60 percent of all foreclosure activity in the quarter, with California alone making up more than a quarter of all U.S. foreclosure filings.
Detroit and Atlanta were the only cities outside California, Florida, Nevada and Arizona to make RealtyTrac's list of the 20 hardest-hit metropolitan areas.
The combination of sinking home values, tighter mortgage lending criteria and an economy that many economists think has already slipped into recession has left hundreds of thousands of homeowners with few options. Many can not find buyers or owe more than their home is worth and can not refinance into an affordable loan, with the global credit crisis making loans far less available.
For those who can qualify for a loan or have cash to invest, there are bargains to be had, especially in ravaged markets like Nevada and California. Last month, foreclosure resales accounted for more than half of existing home sales in California last month, as home sales jumped 65 percent from a year ago, while the statewide median home price fell 34 percent to $283,000, according to MDA DataQuick.
RealtyTrac, however, reported foreclosure filings in September were actually down 12 percent from August. But much of that decline was the result of new state laws that delay the foreclosure process. In California, for example, lenders are now required to contact borrowers at least 30 days before filing a default notice. A similar law in North Carolina gives borrowers an extra 45 days.
Still, that's not likely to be enough to save homeowners who owe more on their mortgages than their homes are worth. Nearly 12 million of the 52 million Americans with a mortgage – 23 percent – are in that position, according to Moody's Economy.com.
It remains to be seen how much the government's intervention will stem the housing crisis. Earlier this month, the Federal Housing Administration launched a program that aims to prevent foreclosures by allowing homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan. The bill is projected to help about 400,000 households.
Meanwhile, the Federal Deposit Insurance Corp., which took over Pasadena, Calif.-based IndyMac Bank over the summer, has been aggressively modifying troubled home loans since August in an effort to stave off foreclosures. Congressional Democrats are calling for that approach to be expanded as the Treasury Department buys billions in troubled mortgage debt as part of a $700 billion financial industry bailout.