Foreclosure activity in metro Toledo rose sharply in August, producing the clearest sign yet that another wave of distressed housing could be ready to hit the local real estate market.
According to RealtyTrac Inc., a California real estate data firm that tracks foreclosures, the number of homes in some stage of foreclosure rose 17.8 percent in August from the previous month, and was up 66.8 percent from August, 2011.
In the metro area, which includes Fulton, Lucas, Ottawa, and Wood counties, there were a total of 789 housing units in some stage of foreclosure — a notice of default, scheduled for auction, or repossessed by a lender — in August, or one unit for every 382 homes, according to RealtyTrac, of Irvine, Calif.
In July there were 670 units in the foreclosure process, or one for every 450 homes, and in August, 2011, there were 473 units, or one for every 638 homes.
In Lucas County, foreclosure activity in August was up 24.4 percent from July, and up 107.5 percent from August, 2011.
In the other three counties that are considered part of the Toledo metro area — Ottawa, Fulton, and Wood — foreclosure activity was down in August compared with the same month in 2011.
Real estate broker Jon Modene, a foreclosure specialist at ReMax Masters in Perrysburg, said it comes as no surprise that foreclosure activity is rising in metro Toledo.
Many homeowners are still seriously “underwater” — that is, owing more on their homes than the homes are worth. As debts pile up, many in that situation end up either defaulting on their mortgages or just walking away from their home, he said.
“I think the economy is still in very bad shape. There’s been a huge upswing in real estate activity, but it’s kind of a dead-cat bounce,” he said, using a Wall Street term that refers to economic situations where a brief resurgence is experienced following a severe decline.
Mr. Modene said he recently attended a real estate conference where an expert warned that the number of distressed houses financed by Fannie Mae or Freddie Mac was still sizable.
“The speaker said there’s a huge number of foreclosed assets still coming down the pike,” Mr. Modene said. "He estimated only 25 percent of foreclosed houses with Fannie and Freddie have made it through the system, and that there’s another 75 percent still to come. He said to prepare for a lot of trauma.”
Asked why foreclosures appeared to be dwinding earlier but are now increasing, Mr. Modene said it seems as though the foreclosure activity is being “managed” so as not to flood the system with distressed properties and further damaging the nation’s real estate markets.
While foreclosure activity in metro Toledo rose, it decreased statewide. There were 9,218 housing units in Ohio that were in some stage of foreclosure in August, or one for every 556 housing units. That was a decrease of 5.2 percent from July. Activity was down 6.3 percent from August, 2011.
The total placed Ohio seventh-highest in the nation in terms of foreclosures. In July the state was ranked eighth, according to RealtyTrac.
Michigan and Ohio switched positions, with Michigan ranking as the eighth-highest state in the nation in foreclosure activity after showing slight improvement in August. The state had a total of 7,648 housing units in the foreclosure process, or one unit for every 593 homes.
Michigan’s August foreclosure rate was down 12.7 percent from July and down 41.2 percent from a year ago.
Contact Jon Chavez
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