Home Foreclosures Skyrocketing
For an increasing number of people in our area the "American Dream" is turning into the "American Nightmare."
In recent weeks the Hamilton County real estate market is taking a sharp downward turn with an ever-increasing number of home foreclosures. Banks are just saying no to people struggling to make ends meet and that means a lot of homes are flooding the market in foreclosure..
"Foreclosures are just increasing astronomically all of a sudden," according to Cindy Walker, managing broker of Crye-Leike Realtors foreclosure division.
Walker said the days of the Chattanooga area being immune to the nationwide foreclosure crisis are over.
RealtyTrac, an on-line real estate service, agrees with Walker's assessment. RealtyTrac shows there are 1,383 homes in Hamilton County in bank-owned foreclosure with another 240 properties in pre-foreclosure. That compares to just 698 houses listed for sale by owners.
In June alone an additional 142 homes were added to Hamilton County's foreclosure total which is up 34% since May when 116 homes went into foreclosure. That compares to a 25% increase from June 2008 to June 2009.
The latest example Walker is handling is a two-story, grey stucco home on Igou Place Drive where the bank just finalized a foreclosure. So why are so many more middle-class families loosing their homes?
Walker said families struggling with job losses, furloughs, pay cuts and other financial problems like medical bills have been trying to get help from their lenders, who have been keeping the foreclosure process in limbo the last three-to-four months.
"Because there are so many people that were trying to do the bailouts, trying to do forbearance plans, loan modifications and now all of these people that could not do that are coming into the foreclosure scenario," Walker explained.
Foreclosures hurt the real estate market even further because many people forced from their homes take their aggressions out on the houses. Walker said that in many foreclosed homes the interiors are vandalized and items are taken from the property. We found toilets missing, light fixtures ripped from walls and ceilings and other damage inside the Igou Place Drive home. Walker said this further de-values the property.
Foreclosed homes also negatively impact others in the neighborhood, especially those that have been up for sale.
"If they've got foreclosures in their neighborhood more than likely they're going to see reduced prices in the neighborhood," Walker said.
So what happened to the hundreds of billions of dollars in taxpayer bail-out money the federal government gave banks to help ease the foreclosure crisis? Walker said it appears to her that most of that money is not being used to save families in trouble. She says lenders are just not budging when homeowners ask for help because in part, they're stuck with a lot of foreclosed houses.
"They've got way too much inventory to sit there and help everybody," Walker explained. "I'm still seeing people that have told me, I sent in all but $500 of my past two payments and they sent it all back and foreclosed, and that's ridiculous."
Walker added the situation in Hamilton County won't ease anytime soon. She believes the foreclosure trend will continue for the next 12 to 18 months.
Nationwide the foreclosure trend is skyrocketing, according to RealtyTrac:
- there are 1,927,155 properties now in foreclosure
- there were 337,211 new foreclosures in June 2009, up 15,731 units or 5% from May
- the sales price of foreclosed homes has plummeted an average $25,745 or 12.2% since June 2008
- the number of foreclosed homes being sold has dropped 95% since May 2008
To find out more about foreclosure trends and to see maps showing foreclosures in your state, county or neighborhood go to this website: http://www.realtytrac.com//
