News
News Home
Quick Bites
Exploradio
News Archive
News Channel
Special Features
NPR
nowplaying
On AirNewsClassical
Loading...
  
School Closings
WKSU Support
Funding for WKSU is made possible in part through support from the following businesses and organizations.

Akron Children's Hospital

Wayside Furniture

Lehmans


For more information on how your company or organization can support WKSU, download the WKSU Media Kit.

(WKSU Media Kit PDF icon )


Donate Your Vehicle to WKSU

Programs Schedule Make A Pledge Member BenefitsFAQ/HelpContact Us
Economy and Business


Backlog of foreclosures could hurt Ohio home sales
"Shadow inventory” can hurt property values when competing with regular, higher-priced homes
Story by BRIAN BULL


 
Euclid homeowner Janis Thompson, whose house is now flanked with foreclosures.
Courtesy of Brian Bull
Download (WKSU Only)
In The Region:
Homes sales are up for the 21st consecutive month in Ohio. But concerns linger over the impact of foreclosures, including what’s called “shadow inventory" -- bank-owned foreclosures not yet listed on the market, that can hurt property values or compete with regular, higher-priced homes. For Ohio Public Radio, WCPN's Brian Bull has more.
BULL on Ohio's shadow inventory

Other options:
Windows Media / MP3 Download (4:42)


Sixty-five-year-old Janis Thompson and her dog, Zoodle the Poodle, live in Euclid. Thompson wanted to escape the Midwest winters this year, by selling her cozy colonial and moving to North Carolina. But now she’s staying put, given recent events.

“Each house on each side of me have gone into foreclosure. The one to the south of me, the lady lived there for 26 years. The one to the north, he had only been there maybe five years. But both of them lost their jobs, and now both of them have lost their homes.”

Declining Values
Thompson is grateful she's keeping her own home. But the value,  once estimated at about $105,000, is now pegged at $78,000.

“After 17 years of paying mortgage faithfully, I’m not sure that I could sell the house for enough to cover the mortgage and Realtor fees.”

Thompson says there may be a dozen homes on her street that’ll be up for sale this year.

RealtyTrac shows about 500 homes in Euclid are bank-owned, many priced at 20 to 50 percent of their original value.

Daren Blomquist is RealtyTrac’s vice president. He says nationally, there are 44,000 bank-owned foreclosures, down from 55,000 a year ago and 73,000 in 2011. But Ohio is bucking that trend.

“Going through the month of March, we saw over 4,500 properties in Ohio repossessed by banks. And that was up 39 percent from a year ago. That increase was the seventh straight month in Ohio that we’ve seen a year-over-year increase in those bank repossessions, so the numbers are actually going the opposite way in Ohio, unfortunately. That’s also pushing Ohio’s foreclosure rate to No. 4 in the country, behind Nevada, Florida and Illinois.”


More shadows
RealtyTrac says Ohio also has a 25 percent increase in unlisted, bank-owned foreclosures, known as shadow inventory.

Unlike occupied homes, these can suffer damage from natural disasters, vandals or scrap metal thieves that may go unnoticed or fixed for some time.

Then, once they’re finally listed for sale, their lower price can undercut the local market rate.

One such property is getting prepped for market in South Euclid. At the three-bedroom house on Prasse Road, Edward Bugos waves an inspector inside. Bugos is a Realtor and broker with Caldwell Banker/Hunter Realty. He explores the 90-year-old house, pointing out missing or broken fixtures, unfinished renovations and a child’s bedroom riddled with graffiti.

“It’s sometimes very sad when I have to go into some of these houses, and just see how people lived in the past. And it’s like, 'Wow…I can’t get over some of this.’”


Waiting on the judge
RealtyTrac says part of the reason Ohio is seeing an increase in its shadow inventory is that it’s a judicial foreclosure state.

That means a judge must review every single foreclosure, compared to other states that simply work with a trustee—usually a title company—to send a defaulted property to auction.

Given the foreclosure crisis that’s hit northeast Ohio in recent years—and the amount of paperwork involved—the region may finally be getting around to its share of backlogged foreclosures, while other states have already processed theirs.

“This one here was probably part of the shadow inventory that’s been lurking out there for the last 13-14 months, waiting to come to the market," says Bugos. "And we have a contract pending on it already, $34,900.”

Compare that to $105,000, which was its selling price in 1999.

 

How does shadow inventory get to market?

“There probably is an ebb-and-flow and a science to it, but we don’t know what it is.”

That’s Daniel Keltner, a Realtor with eight years’ experience in working with bank-owned properties in Northeast Ohio. His clients include Fannie Mae, HSBC and many smaller firms. He says while banks don’t discuss their shadow inventories, they are motivated to sell. Rather than rolling out such properties on an “as-is” basis, “a lot of our clients are taking a different stance. They’re doing really good things to fix these properties up, so they don’t bring the neighborhood down.”

 

Back in Euclid
Janis Thompson hopes property values will bounce back within five years. While not terribly excited about spending more winters in Ohio, she’s resigned to staying put.

“Originally, I felt terribly depressed. I’ve picked out an apartment complex in the Raleigh area that I was going to move to. I have family down there. I thought, ‘Oh, you’re still young enough, you can make friends,’ and now I have no idea when—if ever—I can get down there. I don’t think we have choices anymore on that.”

For now, Thompson and her friends will keep an eye on the empty homes dotting their neighborhood -- and wait for its recovery.

Add Your Comment
Name:

Location:

E-mail: (not published, only used to contact you about your comment)


Comments:




 
Page Options

Print this page

E-Mail this page / Send mp3

Share on Facebook



Stories with Recent Comments

Environmental study nears completion in East Liverpool
Twenty years ago my twin sister and I protested the building and operation of the WTI facility citing several studies that indicated the risk of cancer due to ...

HOF's Canton expansion could take an island and make it a village
I live in the block from Broad St to the Hall of Fame and will be impacted by the expansion. I am in the process of selling my home and planned to long before i...

Cleveland redeploys police to replace rejected red-light traffic cameras
Periodic rotational enforcement without warning does NOT change behavior and the city officials know that. This is the basis of all officer-run enforcement trap...

New enrollment period offers more insurance options
The removal of federal funding for healthcare CO-OPs may limit the growth of the CO-OP movement. http://www.healthcaretownhall.com/?p=6381

The family of Boardman vet killed in Vietnam receives his medals
My name is Mike Eisenbraun. I am Larry's brother. I was 14 years old when Larry was killed in Vietnam. He has been gone for 46 years but it seems like yester...

Cleveland seniors are creating new wealth -- and facing new challenges
Why is anyone surprised that we people over 65 are not retiring? If you have been paying attention, defined company funded pensions were phasing out in the eigh...

Ohio company cuts off a dairy supplier after allegations of animal abuse
these people should be held accountable for their actions. i would be more than pleased to see a year or more behind bars. i will NEVER eat anything that comes ...

Goodyear recruits thousands of vets
What a wonderful interview! Excellent reporting skills by a talented young reporter! I look forward to hearing more from Ms. Schley!

Ohio Democratic Party begins the rebuilding process
I agree 100% with Sen. Brown. I think it is absolutely critical for the Democratic Party in Ohio to engage in the long, tedious, hard task of re-building from t...

Copyright © 2014 WKSU Public Radio, All Rights Reserved.

 
In Partnership With:

NPR PRI Kent State University

listen in windows media format listen in realplayer format Car Talk Hosts: Tom & Ray Magliozzi Fresh Air Host: Terry Gross A Service of Kent State University 89.7 WKSU | NPR.Classical.Other smart stuff. NPR Senior Correspondent: Noah Adams Living on Earth Host: Steve Curwood 89.7 WKSU | NPR.Classical.Other smart stuff. A Service of Kent State University