Local home foreclosure numbers are on a downward trend and are far lower than when they reached their peak in 2010, according to records in the Calhoun County Probate Office. Some experts say the decreases could encourage home prices across the board to rise and further strengthen the market.
“It’s happening, but not quickly … housing markets are clearing slowly of foreclosures,” said Leonard Zumpano, professor of finance at the University of Alabama. “I think if we have no major shock to the system … the market will follow.”
The Calhoun County Probate Office reports 79 foreclosures during the first quarter of this year, fewer than the 88 foreclosures in the first quarter of 2011. The new numbers are also lower than the 90 foreclosures reported in the fourth quarter and 91 reported in the third quarter of 2011.
The amount of foreclosures reported so far this year and last year are all lower than the 117 foreclosures reported in the second quarter of 2010 – the highest amount recorded since the housing market crashed and the recession began in 2008.
“This foreclosure business is going to end and I think we’re at the end,” said Everett King of ERA King Real Estate in Anniston.
King said people who didn’t lose their jobs during the height of the recession are now more confident and willing to purchase homes, particular foreclosed homes, which are usually sold at good rates.
“Then there is this urgency created because they know interest rates aren’t going to stay at 4 percent forever.”
When the housing bubble burst, triggering the recession and high unemployment, fewer people could pay their mortgages, causing an increase in foreclosed homes. With more homes for sale, prices tumbled and further weakened the housing market and construction industry.
“It just put a whole damper on the whole housing sector,” Zumpano said of foreclosures. “It was just not a market conducive to new construction. As these foreclosed homes begin to clear, we’ll see the housing market improve.”
Shad Williams, president and CEO of Cheaha Bank, said his bank has dealt with fewer home foreclosures in recent months.
“We just don’t have many anymore,” Williams said. “And if we do have some, they are commercial and not residential.”
Like King, Williams said the drop in foreclosures is partially due to improved consumer confidence.
“Consumers feel better –- they are not seeing as much stress in their households as earlier,” Williams said.
King said his real estate firm does not deal with foreclosures, but that it has likely benefitted from the recent drop in foreclosed homes.
First quarter sales this year are 40 percent above the first quarter of last year, King said.
Williams said his bank is also noticing improvements in the housing market, such as an increase in mortgages.
“We recently went from two to four people in our mortgage department,” Williams said. “Yes, we’re busy. It takes longer to get a mortgage now, but we’ve got money and we’re trying to lend it out.”
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star