Local mid-year foreclosures increase, buck national trend

July 27th, 2011 Luke Mofflin Leave a comment Go to comments

Foreclosures declined in more than 84 percent of the US metro areas during the first half of this year, but that wasn’t the case in the Kingsport-Bristol or Johnson City Metropolitan Statistical Areas.

According to RealtyTrac’s mid-year report, foreclosures filings increased in Kingsport-Bristol and Johnson City when compared to the last six months of 2010. A comparison with first six months of 2010 show filings increased in Kingsport-Bristol and declined in Johnson City.

During the first half of this year there were 419 filings in Kingsport-Bristol and 286 in the Johnson City MSA. Sullivan and Washington counties accounted for 74 percent of all foreclosure filings in the seven counties that make up the two MSAs.

Sullivan is the only county in the region that had more foreclosure filing during the first half of this year than during the same period last.

The bulk of Sullivan County’s increase came during filing spikes in January and May. Filings in Washington County have been trending lower since the first of the year, although June’s filings broke that down trend.

The decrease in filings for most metro areas doesn’t mean those markets are staging a turnaround.

James Saccacio, RealtyTrac CEO, said, the foreclosure pipeline is still clogged in many local markets. The backlog is due to a glut of already-foreclosed properties that banks are having a hard time selling, and the foreclosure process slowdown following last year’s robo-signing scandal. That scandal focused on banks being accused of mishandling paperwork and not following foreclosure protocols.

The biggest declines in the number of foreclosures are in judicial foreclosure states where defaults go through the courts and paperwork is scrutinized by judges. In Tennessee, lenders can use either a judicial or non-judicial foreclosure process.

During the foreclosure crisis, the local housing markets have not suffered as much the markets that receive the most media attention. The reason is local markets did not participate in the housing bubble to the extent of the markets that have been hit hardest. But that doesn’t mean foreclosures have not affected local home sales and prices. The increasing number of foreclosures has added to the glut of homes on the market from recession and has resulted in a big increase in the “for sale” home inventory. Still, many local Realtors have described the local foreclosure situation as “a problem, but not a crisis.”

According to the Northeast Tennessee Association of Realtors’ mid-year Trends Report, 18.7 percent of all preowned homes sales in the 11-county region were foreclosures. So far this year foreclosures accounted for 18.6 percent of all existing home sales in Sullivan County and 14.3 percent of Washington County sales. Those figures are just for the foreclosures market and sold through the local Multiple Listing Service, which does not include all foreclosure sales or auctions.

Five states now account for more than half of all the foreclosure activity in the nation. Those states are California, Florida, Michigan, Arizona and Nevada.

During the first half of this year, foreclosure fillings went to one in every 111 homes in the nation. In Tennessee filings went to 1 in every 161 homes.

So far this year filings have gone to 1 in every 351 homes in the Kingsport-Bristol MSA. In the Johnson City MSA the ratio is 1 in every 317 homes.

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