The Idaho Statesman reports on the housing crisis problems there. Although foreclosures are down, nearly 20% of homeowners are still underwater on their mortgage, meaning walkaways are still a concern.
The number of homes sold in the Treasure Valley is up dramatically, while foreclosures are down and short sales up – all good news.
But other statistics indicate that about one in five homeowners across the state owe more on their homes than they’re worth; about 7.4 percent of homeowners were more than 90 days past due at the end of October; and home prices in the Valley remain depressed.
“I don’t want to be all doom and gloom,” said Lance Churchill, attorney and educator on distressed real estate investments and the economy. But “that’s an indication of where we’re going. Anytime you have people upside down, you have a problem.”
Homeowners who want to sell will continue to have a difficult time getting what they may have paid or still owe for their home, especially if they purchased or built at the top of the real estate bubble in 2006, experts said.
“It’s a very tough situation,” said Debbie Hobbs, of Action Association Management, which manages six homeowners associations with more than 500 homes in Canyon County. “We’re getting situations where people are walking away from their homes. I’m seeing a lot of foreclosures, not only of homes, but of developers.”
According to IdahoDataProviders.com, Valley foreclosure filings did drop 13 percent in November after jumping 31 percent from September to October. The Valley’s November short sales – when a home is sold for less than is owed, with bank approval – were up by 17 homes to a total of 2,718. The number of bank-owned properties was down 2 percent to 1,236 in November, the service reported.
But Charlie Nate, IdahoDataProviders.com president, expects filings to spike again in January, mostly because adjustable-rate mortgages taken out in recent years are due to reset.
“In my opinion, it’s going to be even worse next year,” Nate said. “Until these distressed properties level off, we won’t see a turnaround.”
Lender Processing Services reports that national delinquency and foreclosure rates are hitting new highs. For Idaho, the service calculated that by the end of October, 9.8 percent of loans were delinquent on payments or in foreclosure, and 7.4 percent of loans were delinquent 90 days or more. The rate of non-current mortgage loans in Idaho jumped 21 percent in the past six months compared to 22 percent in Oregon and Washington, and 30 percent in Wyoming – the highest rate increase in the United States, LPS said.
Lender Processing Service also found that nationally:
4.02 percent of loans that were current as of year-end 2008 are seriously delinquent today. Subprime, adjustable-rate mortgages and alternative documentation loans have the highest rates of deterioration.
Deteriorating loans were up in October by 300 percent, meaning that three loans are deteriorating for every one that improves.
Foreclosure timelines continue to extend, with almost 30 percent of loans that have missed 12 payments still not having foreclosure initiated in October, compared to 13 percent in October 2007.
Other experts said some foreclosed properties have not made it onto the market yet. Other homes are headed for foreclosure but have been delayed by modification attempts or banks and government agencies holding onto them.
“Over 30 percent of those in foreclosure for 12 months are not even on the market yet,” Churchill said. “There’ll be a steady stream of inventory that’s not on the market that will be coming onto the market for a while to come.”