Foreclosures are still a drag on the Twin Cities housing market and new data suggest we’ll be seeing the foreclosure tide rising again.
But there are a few differences between now and when the crisis began that may ease the next round of foreclosure pain.
MPR’s Jess Mador reported this morning on the aggressive efforts by Anoka County to reclaim foreclosures to get them back on the market and stabilize hard hit communities.
We’ve heard from local Realtors who believe the Twin Cities market should be able to better absorb the houses that come on the market in the next foreclosure bump — and that the physical condition of foreclosed homes coming on the market has improved, making them easier to sell.
“A few years ago every house we got was abandoned. I think more people are staying in their homes now and trying to see what (options) are available to them,” said Barry Tanner, an Edina Realty agent who specializes in foreclosures.
The early days of the foreclosure crisis created a spate of vacant houses that led to thefts of copper piping and other crimes. In some neighborhoods, Tanner said, you’d see aluminum siding torn off the house as high up as thieves could reach without a ladder.
“We had a lot of homes in the more urban parts of Minneapolis or St. Paul that we got back that were just completely boarded, condemned.”
It’s harder to sell a condemned house. “You’re probably not going to get a standard loan on it” so it likely needs to be sold to an investor rather than a potential homeowner. The house needs to be brought up to code before anyone can live there.
Tanner also sees fewer of those situations now as people who have lost their homes are staying in the home through the foreclosure and sheriff’s sale process. Lenders are also paying for new carpet, paint and other improvements before the house is put on the market, he added.
Finally, the use of “cash for keys” — getting an ex-homeowner out quickly and neatly by paying them a couple thousand bucks to leave the house “broom clean” on the way out — is also helping keep the foreclosed homes in better condition.
(Mador filed an in-depth piece for MPR last week on “cash for keys.”)
We don’t know yet how much the changes in the condition of foreclosed homes will help the market in the coming months. Can’t hurt.
Got a different view or better data on the condition of foreclosed homes in the Twin Cities? See something we’re missing?
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