ERIC BRADY The Roanoke Times

A house in Roanoke's Old Southwest neighborhood is slated to be auctioned as part of a bank foreclosure.

Angela Batey's sales were sluggish until she began helping people buy homes lost to foreclosures this year.

Now, the Roanoke real estate agent's business is hopping with all kinds of buyers hunting for deals.

"I'm busier than I have ever been," said Batey, who represents buyers in many kinds of home transactions for Gracious Living Realty in Roanoke. She estimated that at least 80 percent of her sales are from bank-owned properties that have been through foreclosure.

The hardships of homeowners in the Roanoke and New River valleys are erupting into a flood of foreclosure filings, an indication that the region's housing woes are far from over.

The abundance of lender-owned homes on the market is forcing real estate prices down across the country and paving the way for some buyers to snatch tremendous deals.

Foreclosure filings in the Roanoke Metropolitan Statistical Area rose 590 percent from January through August of this year, compared with 2008, according to RealtyTrac, a California-based online service that tracks foreclosures. The Roanoke MSA includes the cities of Roanoke and Salem and the counties of Botetourt, Craig, Franklin and Roanoke.

"It seems to be a continuing trend of the folks who were in trouble a year ago," said Bob Rouse, an agent with Young Realty Co. in Salem, who lists and sells foreclosure properties. "Circumstances haven't really changed to allow them out of that hole yet."

Similarly, foreclosure filings in the Blacksburg-Christiansburg-Radford MSA were up 633 percent January through August 2009, compared with 2008, according to RealtyTrac.

RealtyTrac reports the beginning of the foreclosure process by tracking auctions and bank repossessions.

The region's foreclosure rates are low compared with the rest of the state. For example, in August, one in every 640 households filed for foreclosure in the Richmond MSA, compared with one in every 1,018 households in the Roanoke MSA, according to RealtyTrac.

In August, there were 797 foreclosure filings in Richmond, compared with 137 filings in the Roanoke MSA.

Even so, homeowners across the state face similar challenges. It's a mixture of job losses and people who overstretched their financial limits with adjustable-rate mortgages, local real estate experts say.

No one industry in the Roanoke Valley has failed, but the unemployment rate is higher in this area compared with last year. Unemployment in the Roanoke MSA decreased slightly from July to August from 7.6 percent to 7.4 percent, though it's much higher than the 4.2 percent in August 2008.

Losses in manufacturing and auto-related jobs plague the New River Valley's economy.

Distressed sales, which are foreclosures and short sales, were 31 percent of total home transactions in August, according to the National Association of Realtors.

Locally, it's unclear the extent that lender-owned home sales are driving the real estate market, where home sales were nearly flat in August. Local real estate brokers do not track foreclosure statistics. Rouse said this region's number of lender-owned properties likely is too low to pull down average home prices, which fell 2.8 percent, from August 2008 in the Roanoke Valley.

The prices of a local home in foreclosure may start at $50,000 and rise as high as $300,000, local real estate agents said. And no community is immune to foreclosures -- even those with pricier properties.

Some builders at Smith Mountain Lake have foreclosed on new high-end homes before they are even complete, Batey said.

And lately, more homeowners in Southwest Roanoke County have filed for foreclosure, she said.

"I used to say it's hard to find one [foreclosure] in Southwest County," she said.

Earlier this year, Adam Barton focused on helping homeowners avoid foreclosure. He scoured newspaper advertisements to find houses that he and his business partner and investor, Tim Hogan, could purchase before a foreclosure occurred.

Through their business, Roanoke Valley Homes Inc., the partners bought the houses, fixed them up and sold them.

But lately, homeowners have not contacted Barton and Hogan early enough in the foreclosure process to actually stop it. Many tried to first put their home on the market but then were unable to sell it.

"I just haven't had much luck as far as anyone calling me with any equity left in their home," Barton said. "They are kind of at the end of their road ... just reaching for that last strand of hope."

Instead, Barton attends the area's growing number of foreclosure auctions to buy lender-owned properties.

Often a lender-owned home is priced at below its tax assessed value, depending on the area, Batey said. And though homeowners may find deals on property, they usually must pump significant funds into repairs.

Previous owners typically leave these kinds of homes in bad shape. New buyers may find appliances ripped from the walls, unpaid bills and other home repair issues.

But lately, reselling previously lender-owned houses is more difficult for investors because of the slow sales market. Instead of listing the house for sale immediately, some investors will make necessary repairs and rent it while they wait for the market to pick up, Rouse said.

That is what happened with a Boones Mill house that Bill Carder, the former president of Downtown Roanoke Inc., and his fiancee, Susan Strong, purchased about six months ago from a lender.

They bought the house, painted it, repaired the deck and put it on the market. After the house did not sell in 45 days, they decided to rent it.

They are considering buying other lender-owned houses, including a Smith Mountain Lake waterfront home that's selling for $250,000 below its tax assessment. Through their real estate venture, which now is seven properties strong, Carder said that he earns a full-time income.

He said he's confident in the foreclosure business, even with renting the Boones Mill dwelling. He expects to sell the house eventually.

Carder would not disclose how much money he has made on his housing investments, but "in the end, it's worth it," he said.