Clark County’s flood of distressed properties appears to be receding, thanks to new federal programs and lower prices that have made homes more affordable.
A report issued Tuesday by California-based RealtyTrac showed that sales of homes in foreclosure dropped 29 percent countywide in the first three months of the year.
Foreclosures remain abnormally high, accounting for 421 sales, or about 37.7 percent of 1,117 houses sold from January through April. In the same three months in 2009, there were 593 sales of foreclosed properties, which made up 47.3 percent of all sales.
Real estate experts interpret the figures as a sign of housing market recovery. Before sales and home values can fully rebound, a backlog of foreclosed properties needs to move out of the market. These properties are selling for so little that they are dragging down the prices of other homes as well.
But with foreclosure sales now making up less than one-third of home sales, that drag is diminishing.
“The foreclosed homes become a less significant part of the market,” said Mike Lamb, a real estate broker who works for Windermere/Stellar Group in Vancouver.
“As the market improves, you have other properties become more competitive.”
Home prices — down about 2.4 percent in May from the same month a year ago, and down more than 17 percent from May 2008 — also have been directly affected by a glut of foreclosures in Clark County.
Countywide, one out of every 432 homes was in foreclosure in May. For two years, the county has been listed among the top five for its rate of foreclosure among Washington’s 39 counties.
The number of houses sold in the first quarter of 2010 was about 12.7 percent higher than the same period last year in Clark County, said Scott Anthony, a certified foreclosure specialist with Windermere Real Estate/Stellar Group in Vancouver.
He is not surprised to see shrinking sales of foreclosures.
“I knew it was down,” Anthony said.
He attributed the drop in foreclosed home sales to a rise in the federal programs available to financially troubled homeowners. Some have been more successful with home loan modifications through the federal Home Affordable Foreclosure Alternatives program, which was launched April 5.
The new program, unlike its predecessor, Home Affordable Modification Program, also offers incentives to lenders to participate in a short sale. The option allows homeowners who owe more than their home is worth to negotiate a new contract in which the lender agrees to sell the home for less than is owed.
The new program also gives renters in foreclosed properties a 90-day, or end-of-lease, grace period to stay in the home.
“It has taken some of the homes off the market that would have gone up as foreclosures,” said Anthony, who markets and sells foreclosed properties owned by banks and home mortgage lenders.
Anthony also said many bank mortgage departments have started to hire more staff to process mortgage loan modifications and negotiate short sales.
He said its in the best interest of the bank.
“It costs these banks about 1 percent per month to hold onto these properties, so they’re losing money that way,” Anthony said.
