“I was looking for better value … more square footage for the price,” said Carter, a recent nursing school graduate who closed on her first home Thursday through the assistance of Joan Barnwell of ERA King Real Estate. “And it was in really good condition, with new appliances, new carpet and paint.”
Carter’s new home was previously a foreclosure, one of the hundreds that have flooded the Calhoun County housing market since the recession hit in 2008 — leading to depressed home values but also better purchases for first-time buyers. However, some experts say such conditions could be coming to an end if foreclosures continue to decrease in the county as they have in recent months.
“We are at the end of the foreclosures,” said Everett King of ERA King Real Estate. “I will be shocked if we are having a major foreclosure discussion next October.”
According to the Calhoun County Probate Office, Calhoun County saw 85 mortgage foreclosures during the third quarter of the year. The third-quarter numbers are still higher than the number of foreclosures reported before the recession. However, there are fewer foreclosures during the third quarter of this year compared with the same period during the last three years, indicating a downward trend.
“We believe that the wave of foreclosures is coming to an end,” said Shad Williams, president and CEO of Cheaha Bank. “We are putting together our financial forecast for next year and we are not including much in the way of foreclosures.”
The decrease in foreclosures has already resulted in rising county home prices, King said. According to the Alabama Center for Real Estate, average home sales prices have increased steadily, from $101,345 in May to $124,567 in August. September sales numbers are not yet available.
“When they are gone, we will get into a normal market cycle,” King said of foreclosures. “We’re not going to know what the real value of a home is until we get there.”
Williams said the decrease in foreclosures has meant fewer costs to Cheaha Bank’s customers.
“What it allows us to do is to cut our expenses,” Williams said.
Leonard Zumpano, professor of finance at the University of Alabama and the chair of real estate economics for the Alabama Association of Realtors, said many parts of the state and country are experiencing fewer foreclosures.
“The housing market in general is getting better,” Zumpano said. “Prices are going up … banks have been more willing to renegotiate loans.”
King noted that the housing market has improved partly because the federal government has basically left it alone this past year.
“Neither side of the aisle has done anything to help and that’s exactly what they should do,” King said. “They should let the market fix itself.”
Still, the skyrocketing number of foreclosures has not been a burden on everyone. When the housing market crashed in 2008, David Dethrage of the Home Realty Company in Anniston was worried how he would make ends meet. Then his company shifted its focus toward foreclosed properties by representing the government-sponsored enterprise, Fannie Mae.
“We’ve been fortunate to represent Fannie Mae during these tough economic times,” Dethrage said. “I’m not sure we’d still exist without that business.”
Dethrage agreed that foreclosures are decreasing in the county, but adds that they are still above the average for the area.
“I predict a return to what it once was, but for the immediate future, it will be more of the same,” Dethrage said of foreclosures. “I encourage people to understand we’re still in the middle of a process of the market absorbing a large number of these homes.”
In the meantime, new home buyers like Carter can take advantage of the relatively low sales prices brought about by all the foreclosures.
“We’re looking forward to living in the area,” Carter said.
Star staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star