Tuesday, January 27, 2009
Housing downturn hits Southwest Virginia
Foreclosure filings are up more than 260 percent in the Roanoke and New River valleys.
Photos by Stephanie Klein-Davis | The Roanoke Times
Strauss Construction built these two homes in the Hampshire development in Southwest Roanoke County, which calls for 44 houses.
Larry Harris carries framing into a home being built in the Hampshire development in Southwest Roanoke County. A real estate agent with a Salem company said the average price of a home in foreclosure regionally is between $100,000 and $110,000.
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Foreclosure filings climbed significantly in the Roanoke and New River valleys in 2008, a signal that the poor economy and subprime mortgage woes are filtering through Southwest Virginia. Still, compared with other parts of the state, the rise in foreclosure activity in Southwest Virginia is modest.
Last year, foreclosure filings increased 262 percent for the Roanoke Metropolitan Statistical Area, according to RealtyTrac, a California-based online service that tracks and monitors foreclosures. There were 301 foreclosure filings in the Roanoke MSA, up from 83 in 2007. The increase was largest in December, when 115 foreclosures were filed in the Roanoke metro area.
Roanoke had the most foreclosure filings, at 184 up from 37 in 2007.
Foreclosures also rose in the New River Valley. The total filings were up 263 percent from 2007. In 2008, 40 homes were in foreclosure in the Blacksburg-Christiansburg-Radford MSA, compared with 11 in 2007.
RealtyTrac reports the beginning of the foreclosure process by tracking auctions, bank repossessions and default notices.
Though the increases are large, the Roanoke and New River valleys have some of the lowest rates of foreclosure in Virginia.
For example, in suburban Richmond's Chesterfield County, 1,418 people filed for foreclosure in 2008, which is one in every 81 households, according to RealtyTrac. Fairfax County in Northern Virginia reported 11,933 foreclosure filings, which accounts for one in every 33 households.
Comparatively, one out of every 422 households filed for foreclosure in the Roanoke MSA, according to RealtyTrac. For the Blacksburg-Christiansburg-Radford MSA, there was one foreclosure filing for every 1,695 households.
The region's foreclosure rise likely has been spurred by increased layoffs and a growing number of homeowners with subprime mortgages who can no longer pay for their homes, said area real estate agents who list foreclosed properties.
The unemployment rate for the Roanoke MSA and the Blacksburg-Christiansburg-Radford MSA climbed in November. The jobless rate was 4.6 percent for the Roanoke MSA, up from 3.2 percent in November 2007, according to the Virginia Employment Commission. For the Blacksburg-Christiansburg-Radford MSA, the unemployment rate was 5.6 percent, compared with 3.5 percent in November 2007.
"The job layoffs and losses are starting to catch up in the Roanoke Valley," said Dan Gay, a broker at Gwyn & Harmon Realtors in Roanoke County who lists foreclosed properties. "More and more people are losing their jobs. People can't catch up."
The region's vehicle manufacturing and auto supplies industries have been hit hard with layoffs in the past year. Those facilities include Volvo Trucks North America in Dublin and Intermet Corp. in Radford.
For the Roanoke MSA, the jump in foreclosures in the latter part of 2008 likely reveals homeowners' struggles during the summer months, Gay said. Generally, after three months of delinquency, a bank will declare a property in default, he said.
With certain financial challenges in the summer, such as high gasoline prices and some layoffs, a foreclosure filing may not have shown up until December, Gay said.
The average price of a home in foreclosure regionally is $100,000 to $110,000, said Bob Rouse, a real estate agent with Young Realty Co. in Salem who lists foreclosed properties.
But lately, he said more higher-dollar homes, such as $400,000 properties at Smith Mountain Lake, are foreclosing.
Similarly, Gay said he used to drive to the Smith Mountain Lake area once or twice a month to examine foreclosed homes for sale.
"I go out there two to three times a week now," he said.
