Distressed home sales rise in Clark County

Sales of foreclosed homes indicate Clark County housing market still lagging.

Clark County and Ohio bucked a nationwide trend of declining foreclosure sales, indicating the local market has yet to fully recover from the widespread housing crisis.

The number of U.S. homes sold in some stage of foreclosure declined 22 percent year-over-year, from one in four properties a year ago to one in five properties during the first quarter of 2013, RealtyTrac Inc. said in a report released last week.

Fewer distressed homes sold nationwide last quarter, RealtyTrac said, and the ones that sold fetched higher prices on average.

But not in the Springfield area — where nearly a third of home sales in the first part of this year involved a property in foreclosure — or Ohio as a whole.

Cincinnati, Cleveland, Columbus and the entire state recorded a higher number of foreclosure-related sales in the first quarter and at lower prices. Ohio was one of 12 states to see an increase in distressed sales year-over-year.

Dayton was the only major Ohio metropolitan area to record fewer distressed home sales and higher sales prices in line with the nation.

“The root cause of all this is Ohio’s just a little bit slower to dispose of these distressed properties than some other states because of the longer judicial process,” RealtyTrac spokesman Daren Blomquist said.

The Irvine, Calif.-based RealtyTrac is a for-profit firm for foreclosure listings.

During the first three months of this year, 171 Clark County homes in the foreclosure process were sold for an average price of more than $51,650. By comparison in the first quarter of 2012, 80 area homes in some stage of foreclosure were sold for an average price of $48,585, the RealtyTrac figures show.

Foreclosure-related sales include properties that have received a default notice, are scheduled for auction or are bank-owned.

Distressed sales drag down home values, Blomquist said, and the more distressed homes that are sold, the more they drag down home values.

“We’ve gotten through most of the toxic loans that triggered the foreclosure crisis in the first place,” he said.

Distressed home sales comprised 30 percent of all home sales in Clark County from January to March, according to RealtyTrac’s estimates. In a normal market, Blomquist said distressed properties represent less than 5 percent of all home sales.

The share of foreclosure sales on the market nationwide remains high, at more than 20 percent, but still less than in Clark County.

Many homeowners remain underwater, owing more on their mortgage than the property is worth, but “rising home prices are helping to rescue at-risk homeowners from foreclosure,” Blomquist said. “They’re more likely to have equity, which gives them a lifeline to other options rather than just foreclosure, such as sale of a home or refinancing.”

Springfield Board of Realtors President Jerome Vinson agreed that Ohio’s judicial process for foreclosures, meaning the properties must work their way through the court system, has contributed to the backlog.

“One positive is that our inventory of homes has shrunk, so it is not throwing up surplus into our market,” Vinson said.

Neighborhood Housing Partnership of Greater Springfield is seeing an all-time high in requests for homeowner assistance, Executive Director Tina Koumoutsos said.

She also credits unemployment rates and underwater mortgages — when more is owed on the property that what it’s worth — as major reasons why homes in Clark County continue to go into foreclosure.

“It is not over in our community,” she said. “We have a long way to go.”

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