Expert Says Don't Let the Foreclosure Numbers Get You Down
Austin foreclosures increased 10 percent so far this year, according to a report from Foreclosure Listing Service. The Austin Business Journal took a look at the numbers.
Among Central Texas counties, Travis and Williamson experienced year-over-year increases so far in 2010, while Hays and Bastrop counties' total declined. Travis County posted the largest amount, with about 8,550 foreclosures up from 7,289. The amount is up about 404 percent from nine years ago. Williamson County homeowners foreclosed on 5,145 properties, up from 4,508 in 2009.
Austin realtors are reporting a fourth annual decline in existing home sales, according to report last week in the Statesman, but they're forecasting a turnaround in 2011.
To keep the news in perspective, we sought some sober second thought from Jim Gaines at the Texas A&M Real Estate Center. He said a ten percent increase in foreclosure numbers might not be as alarming as you would think.
"Austin has done very well and in fact has gained in employment and experienced an economic upswing over the past year or so, but during 2009, like most of Texas, we had our downturn. I suspect it is coming around now, that the statistics are catching up," Gaines said.
"By that, I mean, people who might have lost their job or had other hardships leading to the foreclosure, it generally has a lag of three to six months, before a foreclosure notice is filed and so forth," he said.
"A second factor is that we know a lot of the lending institutions, especially nationally, but even in Texas, are not staffed to handle large increases in the number of problem loans, so it takes them a while to process that," Gaines said.
"Thirdly, don't forget that the early part of 2009 was a pretty good time period. The numbers were fairly low."
We were also curious to get Gaines' take on implications for the housing market should the State Legislature choose to deal with its massive budget gap by slashing state jobs, a measure that could disproportionately affect Austin.
He eschewed Doomsday predictions and said even if there were layoffs, it wouldn't necessarily be dire. "Remember when the legislature meets in January, they're looking over the next two years, so they don't have to do everything all at once. They can spread it out over time, so that it doesn't have as big of a shock on the market."