Local home sales dive, foreclosures soar

Median home price

2010 — $198,500

2009 — $203,000

2008 — $235,000

2007 — $245,000

2006 — $265,000

Source: Riley & Marks Inc., Vancouver

Foreclosures

2010 — 527

2009 — 290

2008 — 235

2007 — 166

2006 — 64

Source: RealtyTrac., Irvine, Calif.

Home sales

2010 — 334

2009 — 590

2008 — 431

2007 — 541

2006 — 711

Source: Riley & Marks Inc., Vancouver

Clark County’s housing market experienced a double whammy in October, with a dramatic drop in home sales driving down prices and a backlog of distressed properties that entered the market faster than they could be absorbed.

The number of homes in some stage of foreclosure countywide surged to 527 in October, an 81.7 percent rise over the same month last year and a 21 percent climb in one month, according to RealtyTrac Inc., which released its monthly foreclosure report today. At the same time, a local housing report tracked just 334 sales of new and pre-owned houses in October, down 43.4 percent when compared with 590 homes sold here in October 2009.

Lackluster sales continued to push home prices down, according to “benchmarks,” the report issued by Vancouver-based Riley & Marks Inc. The median sales price (half sold for more, half for less) was $198,500 for all new and existing homes sold here in October, down 2.2 percent from the median of $203,000 in the same month last year. Clark County’s October median home price was its lowest since January 2005.

Some real estate experts blamed the housing market’s poor performance on obstinate sellers who refused to back down on their listing prices. Others blamed Clark County’s limited job market and an overall lack of consumer confidence.

“It’s a vicious cycle,” said Joe Reitzug, a senior vice president of John L. Scott real estate offices in Portland and Vancouver. “When people are unsure about their jobs, have lost jobs or know people who have lost jobs, they’re not going to buy a new home.”

That has stalled the market, and the ensuing drop in values has pushed more and more troubled homeowners into delinquency and foreclosure, he said. Many are stuck owing more on mortgage balances that are far higher than the home’s actual value, Reitzug said.

“It’s a factor of supply and demand. People are having to lower their prices because of the rising supply,” he said.

Still, others point out that this year’s October sales figures are being pitted against year-ago sales totals that included a federal home buyer’s tax credit that was, at the time, expected to expire at that month’s end. That may have pushed up sales in October 2009 as buyers hurried to take advantage of the tax credit before time ran out. Instead, the credit was extended to give first-time home buyers until April 30 of this year to sign a sales agreement that would give them a tax credit of up to $8,000 if the sale closed by the end of June.

The extension added a reduced credit of up to $6,500 to repeat or move-up buyers who had owned their homes for at least five years.

“It skewed the figures in general because a lot of people were scrambling to get in at the last,” said Don Gladson, a designated broker with Coldwell Banker Barbara Sue Seal in Vancouver.

Some industry experts also said that not all of Clark County’s distressed properties have been listed for sale. Many bank-owned properties are being held back as part of a growing cache of shadow inventory, said Lyn Schubel, a broker with Re/Max Equity Group Inc. in Vancouver.

“The banks are taking them back at a slower pace,” in a deliberate attempt not to flood the housing market and drive prices down further, he said.

Other banks are trying to go the short-sale route, in which the home owner negotiates with the bank to sell the house for less than is owed on the mortgage. Short sales are often a lengthy, three- to four-month process, he said.

“It’s hard to hold onto a buyer long enough for the sale to go through,” Schubel said.

And the short-sale route provides few incentives for sellers, said Scott Mikel, a broker and owner of Scott Mikel & Associates Realtors in Vancouver.

“When people have an option to stay or to lose a lot of money, they stay,” Mikel said.

He agreed that Clark County’s increasing rate of foreclosure continues to affect the area’s home values, although Mikel said he did not see a correlation between October’s drop in home sales and the month’s rise in foreclosures.

“It could be driven by the fact that they lifted the moratorium on foreclosures,” he said.

For a time in October, the nation’s largest mortgage lender, Bank of America, imposed a nationwide halt on foreclosures after it discovered that its employees had approved thousands of foreclosure affidavits without proper vetting. The company has since resumed the process of foreclosing on homes.

In the meantime, attorneys general from all 50 states have promised to investigate the foreclosure practices of some of the nation’s biggest lenders.

Some say, despite October’s low home sales numbers, that Clark County’s housing market is slowly turning around, a trend Gladson gauges by positive feedback from potential home buyers.

Gladson also credited the close of last week’s election for renewed confidence among some house hunters.

“I just think people are feeling more comfortable now that the election is over,” he said.