Are homeowners overextended, or are Rockingham County assessments too low!?
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In reviewing foreclosure notices in the Daily News Record from this past Wednesday (August 13, 2008), I was surprised to see such a consistent scenario of loan amounts exceeding the assessed values of homes. These included:
- A home in Grottoes assessed at $124,700 with a loan in jeopardy of foreclosure with an original amount of $143,200.
- A home in Hinton assessed at $127,600 with a loan in jeopardy of foreclosure with an original amount of $165,000.
- A home in Dayton assessed at $93,200 with a loan in jeopardy of foreclosure with an original amount of $144,784.
Given this consistent relationship between assessed values and loan amounts, I assume one (or more) of the following must be true:
- Rockingham County assessments are too low, and these homes are really worth more — at or equal to the amount that has been financed.
- The homeowners purchased or refinanced at a price well above the actual value of the home at the time of the transaction.
- The homeowners purchased or refinanced at the actual value of the home at the time of the transaction and those values have now fallen dramatically.
Recent sales trends indicate that prices aren’t really going down — so the third possibility doesn’t seem likely. Perhaps it is a combination of the first two factors?
“Foreclosures are rising faster in Virginia than almost anywhere else” — what does it mean for Harrisonburg and Rockingham County??
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This morning the Richmond Times-Dispatch reported that Virginia is 11th in foreclosures. This new ranking was based on a report released yesterday by RealtyTrac Inc.
Some commentary was added by Connie Chamberlin, the president and CEO of Housing Opportunities Made Equal…
“Foreclosures are rising faster in Virginia than almost anywhere else” said Connie Chamberlin…
“Virginia’s stable economy kept foreclosures at bay, but the problem is catching up here. Moreover, lending practices are loose, possibly more so than in other states, Chamberlin said.”
So….what does this mean for homes and homeowners in Harrisonburg and Rockingham County? It depends on when you ask….
In March 2008, the Daily News Record reported that 2007 showed a 38% increase over 2006 in foreclosures in Harrisonburg and Rockingham County.
But two months later, in May 2008, the Daily News Record reported a 15.8% decrease in foreclosures when comparing 2008 (Q1) to 2007 (Q1) in Harrisonburg and Rockingham County.
So, here’s my (elementary) executive summary for you:
- Foreclosures rates are increasing nationwide. (+53%, June 2007 to June 2008)
- Foreclosure rates are increasing in Virginia. (+204%, June 2007 to June 2008)
- Foreclosure rates are decreasing in Harrisonburg and Rockingham County. (-16%, 2007-Q1 to 2008-Q1)