Wednesday, January 23, 2008

Idaho foreclosures have more than doubled over last year

Idaho's housing foreclosure numbers have already more than doubled the total for all of last year, with December's figures yet to be tallied, according to a report released Wednesday.
RealtyTrac, an Irvine-California-based Web site that monitors foreclosures nationwide, reported that there had been 5,338 filings in Idaho at the end of November, or 113 percent more than the 2,508 foreclosures recorded for all of 2006. Year-over-year the percentage increase is 187 percent, said RealtyTrac spokesman Daren Bloomquist.

November's 667 filings were 11 percent above the previous month. Ada and Canyon counties accounted for 393 filings or 59 percent.

Industry reaction to the news was mixed. One expert argued that the growing number of foreclosures would drive down housing prices enough to allow more people to purchase homes, while another countered that people losing their homes won't be in the market to buy another one right away.

Shaun Tracy, an associate broker with Re/Max Capital City., said that the spike in foreclosures might be just the medicine needed to cure the state's ailing single-family residential housing market.

Tracy believes that as desperate homeowners slash their asking price housing affordability will return to the Treasure Valley, where the housing boom of 2005 and 2006 priced many area residents out of the market.

According to the Intermountain Multiple Listing Service, the median price of an Ada County home has risen 43 percent since 2004, or from $169,900 to $232,900 at the end of 2006. Canyon County's median prices went from $107,0000 to $161,900, or an increase of 51 percent for the same two-year period.

"It (the rise in foreclosures) might help re-establish where the market needs to be in order to stimulate sales," Tracy said.

The 667 Idaho foreclosure numbers for November represented one filing for each 893 homes in Idaho. That was still better, however, than the 201,950 U.S. foreclosures last month that amounted to one filing for every 617 homes in the country.

Marc Lebowitz, chief executive of the Ada County Association of Realtors, wasn't convinced that higher foreclosure numbers would translate into higher housing sales.

"Usually, when a person sells a house they buy another one," he said. "But some of these people are going to be forced into the rental market, at least for a while."

Most industry watchers blame sub-prime mortgages made by lenders to consumers with shaky credit histories as the primary reason U.S. foreclosures are on a record pace. The loans initially offer a low "teaser rate." That rate jumps dramatically, however, when the interest on the loan resets, often leaving the homeowner unable to keep up with the new monthly payment.

Meridian-based homebuilder Don Hubble, of Hubble Homes, said there could be more trouble for the housing market if banks begin repossessing homes then sell them at bargain-basement prices, which would drive down housing values throughout the Valley.

Meanwhile, industry sales numbers reveal that the huge inventory of homes hanging over the Treasure Valley housing market and depressing sales continue to decline.

IMLS figures show that the inventory of homes in Ada County has fallen for the fourth straight month -from 5,192 in August to 4,587 in November - a decline of 12 percent.

Canyon County saw a 10 percent drop in its housing inventory for the same period, from 2,697 in August to 2,437 last month.

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