Foreclosures Jump In January

Mike Pennington may see an increase in business, but he is not necessarily happy about it.

The home repair and remodeling professional cleans up and refurbishes vacated foreclosure properties for banks and real estate companies. Because of a court ruling last year, foreclosures are back on the rise.

By The Numbers

Foreclosure Filing Summary

Compares the number of filings in January 2012 to January 2013.

2012 2013 Percent Change

Benton County 72 121 +68.1 percent

Washington County 38 97 +155.3 percent

Statewide 274 1,016 +270.8 percent

Nationwide 210,941 150,864 -28.5 percent

Source: RealtyTrac

“I was really hoping that work would be over. It is a bittersweet business — someone lost their home, but it is work for us,” Pennington said.

He said he hasn’t worked on a foreclosure for a long time, but averaged three or four a month just 18 months ago.

Foreclosure activity in Arkansas all but dried up last year as a court case delayed most foreclosures. The lawsuit was resolved last summer, and foreclosure activity began to slowly rise. There were 218 Benton and Washington county homes facing foreclosure last month, according to RealtyTrac, an online marketplace for foreclosure properties. There were 110 foreclosures in January 2012.

While foreclosures are significantly up from 2012 levels, they are a fraction of where they were during the height of the housing crisis. There were 927 homes in the foreclosure pipeline in March 2010.

Daren Blomquist, RealtyTrac vice president, said the Arkansas housing market just was not as healthy as it appeared on the surface over the past 18 months.

“The sharp increase in January indicates the court ruling simply delayed many foreclosures that would have otherwise happened in late 2011 and 2012,” he said. “This additional influx of delayed foreclosures will eventually mean more distressed sales in the market, which will in turn put downward pressure on home prices.”

Home prices have been on the rise. Median sales price for the two-county area hit $152,500 in December, according to MountData, a real estate marketing firm.

Wayne Vanhook, executive broker with Crye-Leike Realtors in Springdale, said he doesn’t expect the increase in foreclosures to have a long impact on prices.

“It might hurt a bit, but I think there is enough strength in the market to hold up,” he said.

Vanhook said prices should also hold up as Realtors near their busy time.

“More people are buying and selling homes between April and September,” he said. “People are moving, the weather is nice.”

Blomquist said based on what he has seen in other states it could take about 18 months for lenders to catch up with the delayed foreclosures.

“In terms of how high, the good news there is that we don’t expect the numbers to return to the levels they were at during the peak of the foreclosure crisis in 2010,” he said.

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