Woodbury foreclosures could reach 400
The number of foreclosures in Woodbury already has exceeded the 2008 total, and officials say there is no indication the rate will slow in the next several months.
There were 338 sheriff's sales in Woodbury in the first three quarters of 2009, according to Washington County records. The city saw 335 sheriff's sales in all of 2008.
At the current pace, Woodbury could see 400 sheriff's sales this year. Predictions for 2010 are not much better.
"In terms of foreclosures on actual residential properties, I think we're probably going to see a somewhat similar scenario in 2010," said Karl Batalden, the city's housing specialist.
The numbers were not unexpected for Woodbury, which has not been immune from the housing market's collapse and the economic recession. Like other growing Twin Cities suburbs, it has seen its development slow and foreclosure rates increase.
Sales not targeted
In the past nine months, 204 of the city's foreclosures were residential properties - single-family homes, apartments, town homes, twin homes and condominiums. That is about 60 percent of the total.
There have been 89 vacant lots turned over in sheriff's sales. And by the end of September, there were 25 commercial property foreclosures and 20 new, builder-owned residential property sheriff's sales.
Those properties are not concentrated in any particular area.
"There are foreclosures in every single neighborhood of the city," Batalden said.
The latest statistics come as some national estimates suggest the number of residential foreclosures could spike in the final months of 2009 and in early 2010, Batalden said. Some of the speculation is based on the fact that around the country there are foreclosure moratoriums about to be lifted.
There is no similar moratorium affecting Woodbury properties, so it is not clear whether Woodbury's performance will reflect the national estimates. Still, local observers are not predicting a significant drop in foreclosure rates next year.
The Twin Cities real estate community believes the foreclosure rate will get worse before it starts to drop, said Cheryl Schopf, a RE/MAX Results real estate agent. That prediction extends to Woodbury, she said.
Another waive of adjustable-rate mortgages could reset in 2009, raising interest rates and stretching some homeowners' ability to pay, Schopf said.
Permits up, too
Interestingly, while statistics show a continued upward climb in Woodbury foreclosures, September was the city's biggest month of 2008 for residential building permits.
Permits were pulled for 37 units last month - 16 single-family homes, 21 multiple-unit buildings - and another 15 were pulled in the first couple of days this month. That increase brought the total number of residential permits to 198, two below what the city expected for the entire year.
"The fact that we're above something is real good news," Batalden said, suggesting it could be an indictor of "the beginning of a pickup in the real estate industry."
A federal first-time homebuyer tax credit that expires at the end of November may be contributing to the permit numbers.
On the foreclosure front, Woodbury may fare worse this year than Washington County.
The county saw 883 properties go through foreclosure and sheriff's sales in the first nine months of 2009, said Jennifer Wagenius, county property records division manager.
There were 1,258 sheriff's sales in the county in 2008, so the county may be on pace this year to come in under last year's total.
"It seems to be leveling off," Wagenius said. "Personally, I'm cautiously optimistic."
Some people are trying to avoid foreclosure by taking advantage of new government-led housing loan modification programs, but information about the programs is poorly disseminated, said Schopf, who has special foreclosure training.
Also, she said, a growing number of financially pinched homeowners who are headed for foreclosure are choosing to unload their home in a short sale, where the lender agrees the property can be sold for less than is owed on the mortgage. For the seller, a short sale leaves behind a smaller credit blemish than does a foreclosure.
Of course, for some there is an upside to the foreclosure situation.
"For buyers, I tell them that there's some awesome opportunities," Schopf said.
Wente can be reached at email@example.com.