Area Foreclosures Drop, Housing Market Stable

The number of houses in foreclosure dropped more than 81 percent in Benton County and more than 66 percent in Washington County in March, according to RealtyTrac, an online marketplace for foreclosure properties.

There were 24 houses in foreclosure in Benton County and 19 in Washington County this March, according to a RealtyTrac report. Last year, there were 132 houses in Benton County and 56 houses in Washington County in the foreclosure process during the same period, according to the report.

Web Watch

RealtyTrac Complete Report

realtytrac.com/tren…

By The Numbers

Foreclosure Filings

Comparing the number of filings in March 2013 with March 2014.

20132014*Percent Change

Benton County13224*-81.82

Washington County5619*-66.07

State865336*-61.16

Nation152,500117,485*-22.96

Source: RealtyTrac

By The Numbers

First Quarter Foreclosure Filings

Comparing the number of filings 2013 with 2014.

20132014*Percent Change

Benton County424183*-56.84

Washington County21675*-65.28

State2,7731,358*-51.03

Nation442,117341,670*-22.72

Source: RealtyTrac

Home values in Arkansas have normalized, said Kathy Deck, director, Center for Business and Economic Research at the University of Arkansas. The change, especially in Northwest Arkansas, has pushed the housing economy past the crisis stage, Deck said.

The price and number of homes sold peaked in Northwest Arkansas in 2006 and early 2007. Inflated home values fueled foreclosures in late 2007 through 2009, Deck said. A home that is overvalued limits the borrower's ability to pay back the loan. A borrower who cannot repay a loan can hurt his bank's cash flow, Deck said.

The housing market in Arkansas fared better than many states during the recession, Deck said. That makes the housing recovery that much stronger, she said.

"The bubble was less severe," she said. "It was very localized in Benton and Washington counties."

Nationally, filings that start the foreclosure process were up 4 percent, according to the RealtyTrac report. However, overall foreclosure activity decreased for the 42nd consecutive month in March. First quarter foreclosure activity was the lowest since the second quarter of 2007, according to the report.

"Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time," said Daren Blomquist, vice president at RealtyTrac.

Foreclosures slowed by judicial proceedings are a likely cause for the uptick in filings, Blomquist said.

"Banks will also now be able to devote more resources to dealing with the lingering inventory of nearly half a million already-foreclosed homes that still need to be sold," he said.

Arkansas doesn't have a high inventory of homes in foreclosure. One in every 3,919 Arkansas houses is in foreclosure making it 44th in the country. There are 336 houses in foreclosure in Arkansas. Of those, 191 just entered the process.

There will always be homeowners who end up in foreclosure, Deck said. Foreclosures today are more likely to indicate a long-standing financial struggle for the owner, not the result of the housing bubble.

"It's very unlikely that they're getting some kind of surprise," she said.

Home values haven't returned to prerecession rates, but are inching closer, Deck said.

Pricing will rebound as foreclosed homes are sold and are taken off the market. That allows for construction, which aids economic growth, Deck said.

NW News on 04/10/2014

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