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Tuesday, July 08, 2008
Sauk Centre sees spike in foreclosures
City ranks 4th in county with 23 in 2007
Bryan Zollman
News/Sports Editor
Tuesday, July 08, 2008
Sauk Centre has not been immune to a national trend of increased foreclosures as the city's number of foreclosed properties more than doubled to 23 in 2007 from 10 in 2006.
Stearns County senior appraiser in the assessor's office Don Ramler said along with easily attainable credit, there were some unusual financing techniques that opened up the housing market to a broader range of potential home buyers.
These buyers sometimes bought homes from owners whose listings with realtors had expired and offered them what they were originally asking. Once they bought the property, the new owners would often rent them out, collect rent payments or refinance and then default on the loan.
It appears many factors played a role in the high number of foreclosures, namely job market conditions, sub-prime lending issues, market liquidity matters, available financing and the economy.
Due to the spike in foreclosures, Sauk Centre ranked fourth amongst 30 cities in Stearns County last year behind St. Cloud, Sartell and St. Joseph.
St. Cloud was No. 1 with 126 foreclosures, Sartell a distant second with 42 and St. Joseph third with 36.
Sauk Centre's foreclosures doubled for the second consecutive year. In 2005 there were five and in 2004 there were four.
Sauk Centre also ranked second in the county behind St. Joseph with 1.39 percent of all residential/seasonal recreational residential properties ending in foreclosure. St. Joseph was at 2.11 percent and St. Cloud and Sartell were both less than one percent. Sauk Centre has more households than St. Joe, but St. Joe has a higher population than Sauk Centre.
Top townships were Fairhaven with nine foreclosures or 1.23 percent and Eden Lake with five foreclosures or 0.48 percent.
The patterns of foreclosures indicates there are almost three times as many foreclosures in cities than townships.
What is a
foreclosure?
A foreclosure is a legal process that allows a lender to gain possession of and sell a property when an owner fails to make payments on a loan that is secured by that property.
County-wide from 2004 to 2008, the sale price of foreclosures ranged from $3,736 to $914,832. According to a report from the county assessor's office, properties included unimproved land, entry level homes, custom-built homes and lake properties.
The mean sale price was $161,154 and the median sale price $140,250. The trend is that most foreclosures are entry level homes sited in newer neighborhoods on the east end of the county.
In Sauk Centre's case, Ramler said the 23 foreclosures were scattered throughout the city.
Locally, the number of foreclosures has increased steadily the past four years, keeping pace with the national trend.
There were 49,748 residential and seasonal recreational residential properties in Stearns County in 2007 with 0.75 percent (373) of those ending in foreclosure. In 2006, there were 231 foreclosed homes or 0.47 percent, an increase from 124 foreclosed properties or 0.26 percent in 2005.
The first quarter of 2008 shows the trend is continuing as there have been 116 (0.23 percent) properties in foreclosure.
Who gets hurt?
The mortgage companies are the ones left holding the bag when people default on their home loans. In turn they are forced to put the homes back on the market for a fraction of the original purchase price or defaulted loan value.
Homeowners are hurt because they are forced from their homes, and local realtors also feel the pinch.
Suss Kluver of Charlie Walker Realty said it's tough to sell homes with so many foreclosures on the market, some going for half of their loan value. Nationwide, experts say they expect to see an increase in foreclosures in 2009 as well. Locally, there doesn't seem to be much relief in sight, either.
" A lot of homes are just sitting right now," Kluver said. "Our city got hit hard and I think it's going to be a while before it comes back."
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