People in the county are losing ownership of their properties at a higher rate but not just because of a dismal economic climate.
In the fiscal year that ended in June, foreclosures in the county jumped 64 percent as cash flows from the federal stimulus package dwindled and no longer kept banks from foreclosing homes.
Since July 1, there have been 62 foreclosures — already almost double the number from June to December 2009.
Jo Roberson, county director of tax administration, said programs receiving stimulus funds were encouraged to exhaust all avenues, like refinancing loans, before resorting to foreclosure.
But she said the recent move away from stimulus funds might account for the increase in foreclosures.
“You have a period of time where lenders were strongly urged to work things out with folks,” she said. “Many foreclosures went on hold, and all that ended in the mid part of 2010.”
In the six months ending in December 2009, there were 35 foreclosures.
The next six months brought 83 foreclosures as incentives for banks to ensure homeownership ended.
Still, the amount of foreclosed homes is not driving down demand for purchases — the county has seen a rise in aggregate home sales as it recovers from the slowdown, said Mark Zimmerman, owner of RE/MAX Winning Edge.
“We are nowhere near the kind of levels of foreclosures where it’s affecting non-foreclosure sales,” he said. “Is it surprising that they’ve continued to rise for a while? No.”
As the area recovers from a slowdown, yearly home sales through the end of September were up 5.3 percent in Orange County and 1.1 percent for the entire Triangle region.
“Last year was a horrible year in the real estate market across the market, and we weren’t immune from that,” Zimmerman said.
He said he credits better performance in Orange County to the smaller supply of housing and the low unemployment rate, which he attributed to the presence of University and hospital jobs.
As of September, Orange County has an unemployment rate of 5.7 percent, compared with the state’s 9.1 percent.
Zimmerman said traditional reasons, like overextended borrowing or unexpected unemployment, are driving this recent upswing in home foreclosures.
Joe Phelps, owner and broker of Phelps Realty in Hillsborough, said decreased property values have prevented many people from making their payments.
“A lot of people owe more than their house, so they foreclose,” he said.
Though traditional foreclosures continue to be somewhat of an issue for the local real estate industry, Phelps said the increased number of foreclosures has not impacted his business any more than in previous years.
“I’ve seen some increase in foreclosures, as there’s always been some,” he said. “It affects the prices of homes that are out there, but if people don’t have the sale, they’re not changing their price.”
Phelps has worked on the sale of several foreclosed homes and said the majority of buyers are investors.
“The majority of foreclosed homes need work,” he said. “The investors are people who are willing to put a little sweat into fixing them up.”
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