Foreclosures are ticking up across much of Ohio, and Clark County real estate experts said while the value of area homes seems to be on the rebound, it could be a while before foreclosures let up.
Ohio had the third-highest foreclosure rate nationally in August behind Nevada and Florida as lenders moved forward with delayed foreclosure proceedings against delinquent homeowners, according to a new report released Thursday by RealtyTrac Inc.
“Unfortunately, we can’t see the light at the end of the tunnel yet,” said Jim Roediger of Roediger Realty Inc. in Springfield.
Experts say the improving housing market is prompting lenders to start new foreclosure cases against homeowners that have fallen behind on their monthly mortgage payments. Lender activity is also rising to complete foreclosures and repossess properties already in the foreclosure process.
“I think it’s a combination of still a backlog of delayed foreclosures that needed to be dealt with in Ohio that the lenders are finally pushing through,” said Daren Blomquist, RealtyTrac spokesman.
“One of the reasons the lenders are pushing them through now I think is the market is improving. It may seem counterintuitive, but it’s a a better time for them to foreclose now that the market is improving because they have a better chance of recouping their losses on the property,” Blomquist said.
RealtyTrac, of Irvine, Calif., is a for-profit firm that tracks real estate data nationally.
According to information from the Clark County Sheriff’s Office, 527 sheriff’s sales were conducted between January and Aug. 16 last year. During the same period this year, 614 sheriff’s sales happened, said Deputy William Crump of the Clark County Sheriff’s Office.
Although the number of homes going through the foreclosure process might be increasing in Clark County, that’s not necessarily being reflected in the housing stock available on the market, said Jerome Vinson, president of the Board of Realtors in Clark and Champaign County.
While many foreclosures may be in the pipeline, many are not yet ready for sale, Vinson said.
“If we’re still that high as far as foreclosures, they’re not really hitting the market right now,” Vinson said.
Roediger said the number of foreclosed homes available for the market seems to come in bunches then slows to a trickle.
One reason may be that large banks with foreclosure cases all over the country are taking longer to get the homes back on the market, Roediger said. One of the problems with that process is that some homes that might attract buyers are left vacant for several months or more and become less desirable. Homes need to be well-maintained to retain their value, he said.
The best solution is not easy, he said.
“It all comes back to the basics: we all need more good-paying jobs,” Roediger said.
The number of foreclosures in Champaign County has actually declined slightly compared to last year. There were 187 foreclosures from January to August last year, according to figures from the Champaign County Clerk of Courts. That figure was 123 during the same period this year.
One in every 537 properties in Ohio had some kind of foreclosure filing against it in August for a total 9,542 filings, including default notices, scheduled auctions and bank repossessions. That was the third-highest rate of activity in the country.
Foreclosure starts — the initial foreclosure action by lenders to file a default notice in county courts against property owners — spiked 44 percent from July to August with 2,998 default notices filed in Ohio, according to RealtyTrac. However, foreclosure starts are down approximately 27 percent from this time a year ago across the state.
Ohio was one of 17 states to see foreclosure starts rise month-to-month.
Additionally, the level of bank repossessions in Ohio rose 29 percent in August from July, 46 percent higher than it was in August 2012, RealtyTrac said. Lenders repossessed 3,583 Ohio properties in August, according to RealtyTrac.
As a result of the increased foreclosure activity, RealtyTrac listed three Ohio metropolitans among the top 10 U.S. metros for foreclosure rates in August — Toledo (#7), Cleveland (#8) and Akron (#10).
Clark County’s housing market is improving for the second year in a row in 2013. The number of homes sold during the first half of 2013 rose 6.9 percent from the same time period of 2012, and is up 24 percent from January to June 2011. In the first six months of 2013, 573 homes sold in Clark County. However, the average sold price of $93,759 through June was a relatively flat change from the year before.
“The market, I think, is recovered enough to handle additional foreclosures, but it is always kind of going to be unknown how those are going to affect the market,” Blomquist said. “We’re past the crisis phase of this foreclosure problem, but we’re still firmly in the clean-up phase.”
By the numbers: Foreclosure cases filed in Clark County
Statistics show cases of new default notices filed by lenders with county courts.
SOURCE: Policy Matters Ohio