Home foreclosures are spreading quickly across the metropolitan area of St. George in Washington County, Utah. The foreclosed home list in the city is one of the fastest growing across the country.
According to industry experts, St. George is currently experiencing the second flood of foreclosures as banks are starting to unload foreclosed properties from investors into the market. They said that the spread of foreclosed homes in the area has pulled values of properties.
This second wave of foreclosure means disaster to homeowners who just lost their jobs, found themselves unable to afford their monthly mortgage payments and owning properties that they could not sell for the amount needed to cover their loan balance.
Some homeowners were lucky enough to be allowed by their lenders to dispose of their properties with low values through short sales. This method allows distressed homeowners to pay their outstanding loan and avoid the trouble brought about by foreclosure.
Data released by the U.S. Census Bureau showed that since 2000, St. George has been one of the top 10 metropolitan areas in the country in terms of growth. The city often took the number two position on the rank until 2008 when it slid to the 10th place.
Countywide, the foreclosure rate rose by 4 percent, double that of other areas in Utah. According to industry experts, the growth of the housing market in the county was partly attributed to investors who also played a major role on the rise in foreclosures.
According to market data, three in every four real estate sales in the county were short sales or foreclosed home list. Industry experts said that banks and lenders are placing foreclosure properties on the market at very low prices.
Experts said that the effect of bargain-priced foreclosure homes on the market was to pull down market values of properties. They pointed out that home sales in the area rose due to low bargain prices but property values remain depressed.
Market data showed that home inventory in Washington County declined by almost two thirds or 2,200 since the peak of the housing market crisis in February 2008. Having the biggest price discounts are luxury homes in St. George.
The 2009 Economic Report to the Governor predicted that foreclosure rate in Utah will reach a record high before the end of this year as a great number of its residents are joining the unemployment ranks.