List of Distressed Homes Now Up in Previously Stable Cities- By: John Cutts
The list of distressed homes is now growing sharply in cities previously untouched by the foreclosure crisis in the early months of the meltdown.
While the foreclosure pace is now slowing down in foreclosure-battered metro areas like Las Vegas in Nevada, Cape Coral in Florida and Merced in California, foreclosure filings are now increasing in number in cities like Provo in Utah, Fayetteville in Arkansas, Portland in Oregon and Rockford in Illinois. These cities posted foreclosure rates higher than the nationwide average rate in 2009.
Markets like Minneapolis in Minnesota, Seattle in Washington and Honolulu in Hawaii also posted foreclosure rates more than double the nationwide rate.
While cities in the Sand States – Arizona, California, Nevada and Florida – suffered greatly from foreclosures largely because of risky types of mortgage lending like subprime and adjustable-rate lending, previously strong cities are now experiencing high rates of foreclosure activity because of job losses.
In Gulfport communities in Mississippi, the year-over-year increase in foreclosure filings hit a staggering 784 percent. In Houma, Louisiana, foreclosures shot up by 379 percent, and in Roanoke, Virginia, filings soared by 352 percent.
Nevertheless, despite the big growth of the list of distressed homes in these areas, their foreclosure rates were still very low compared to most other areas in 2009. They still occupied the bottom levels of rankings based on foreclosure rates.
In contrast, Boise in Idaho, which posted a 103-percent increase in filings – much lower compared to Gulfport – shot up to the 24th place in a ranking of 203 metro areas based on foreclosure rates. Boise had the highest rate among cities not within the Sand States.
The lowest foreclosure rate in 2009 was posted by Burlington in Vermont and Utica in New York, each of which had only 0.05 percent of housing units receiving foreclosure or default notices. These cities largely escaped the ravages of the foreclosure crisis because they did not experience excessive jumps in home prices during the housing boom.
In Burlington, the home price median remained below $230,000 during the boom, and in Utica, the median sales price never exceeded $120,000 at any time.
According to housing analysts, most cities which did not experience yearly double-digit price jumps during the boom posted only a few defaults and foreclosures, and if they are able to preserve their fairly strong employment levels this year, only a few of their housing units will go into list of distressed homes.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.