Foreclosures constant, prices down

Photo by Karie Bradley

Photo by Karie Bradley

The local inventory of foreclosed properties is holding steady, but prices of homes listed for sale, in foreclosure or not, are dropping.

There are currently 403 foreclosures recorded in Newton County, with 381 listed for sale and 22 pending listing on the market, according to RealtyStore, a national consumer-focused provider of residential foreclosure listings.

The median list price of all foreclosures is $66,000, a decline of 16 percent since January, when the median price was $78,950, according to Peter Ranck, vice president of RealtyStore.

There are 46 Fannie Mae/Freddie Mac foreclosures listed for sale at a median price of $77,400, a decline of 9 percent since January; along with 29 HUD foreclosures at a median price of $54,400, a decline of 8 percent; and 306 bank-owned foreclosures at a median price of $69,900, a decline of 12.5 percent.

"Quantities of listings appear to be maintaining similar to what was seen in January. Pricing has moved significantly downward," Ranck said.

Realtor Nancy Johnson of Southern Classic Realtors, who has worked in the Newton County market for almost 40 years, said she's seen the market in bad shape before, but this is the worst it's ever been and the longest it's taken to recover.

Overall sale prices have dropped about 18 percent since last summer. Homes are selling for half or even one-fourth of their value, Johnson said, adding that she's seen some real estate owned homes go for as low as $7,000 in neighborhoods where average value is between $70,000 and $80,000.

Johnson said lenders aren't willing to modify loans, instead opting to foreclose, noting that only 2 percent of modification requests are granted.

"The lenders are holding everyone hostage with the foreclosures they're dumping on the market," she said.

Sale prices are dropping as a result of the influx of REO, bank-owned and HUD homes, she said. Homes for sale by owner or a realty company are selling, but for less than they're worth.

Homeowners who want to sell can expect to get about 30 percent less than what their home is valued, but they can also expect to buy another house for less than its value, Johnson said.

Johnson estimates about 80 percent of what's currently on the market is distressed in some way, whether it's a short sale, foreclosed on or bank-owned.

She blames the market's slow recuperation on government intervention.

"They're artificially holding down interest rates to 4 or 5 percent. That's what it was back in the '60s," she said.

The idea behind frozen interest rates is to stimulate the market, which is also the goal of the government's assistance, loan and grant programs such as the Neighborhood Stabilization and Georgia Dream Home programs aimed at making home ownership more affordable for the low-to-moderate income.

But Johnson said those programs are only adding to the problem, by putting people in houses they can't afford. Those homeowners are winding up in foreclosure, and the cycle continues, she said.