Too many foreclosures can bring property values down
Posted June 16, 2009 5:49 p.m. EDT
Updated June 16, 2009 8:10 p.m. EDT
Parkton, N.C. — In May, real estate foreclosures across North Carolina were down 35 percent from a year ago, according to foreclosure firm RealtyTrac. One in every 398 U.S. homes received a foreclosure filing last month, and though you may not be worried about defaulting on your mortgage, other foreclosures could affect you.
Parkton's Acadiana neighborhood has a lot of foreclosed homes.
"(The homes) were selling at a very inflated price,” real estate agent Kathy Wood said.
Wood, who works for ERA Real Estate and is commonly referred to as the "Repo Queen," says a small number of foreclosures should not hurt property values.
"If I was to sell my house, an appraiser could not use the foreclosure down the street as a comparable, because he would have to compare it to other existing resales and not to foreclosures,” Wood explained.
However, that doesn't work in a neighborhood like Acadiana where many homes slipped into foreclosure, and appraisers had nothing else to use for comparison.
Wood says most banks that repossess homes have so-called property preservation companies that provide upkeep. Otherwise, it is up to the real estate agent.
"What I would say to a neighbor is if the house is not being maintained, give the agent whose sign is in the window a call because the banks do expect us to do that,” Wood said.
A stigma is often attached to foreclosures, even in the nicest of neighborhoods, Wood said. She has seen a record number of upper priced foreclosures this year.
"I've probably had more listings over $200,000 than I've had my career of doing foreclosures,” Wood said.
Ben Mahaffey says he got a great deal buying one of the foreclosed homes in Acadiana.
"It's awful to see all the high grass, and all that stuff floating around here, everything in disrepair. But it's not that bad,” Mahaffey said.
If you want more information about foreclosures, and how to get assistance if you are foreclosed on through no fault of your own, go to the North Carolina Housing Finance Agency.