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"Things are still moving"
But some county residents are still losing their homes
"Things are still moving" Chesterfield County's real estate market is undoubtedly faring better than many nationwide, but it hasn't been immune to people losing their homes. According to the RealtyTrac U.S. Foreclosure Market Report, there were 186 new foreclosure filings in the county in January, the last month data is available. That's 10 more than were reported at the same time last year, but 21 fewer than last December. Overall the number of Chesterfield foreclosure filings showed a dramatic spike upward starting in January 2008, averaging around 115 per month since then, with the climax coming last December when filings hit a high of 207. According to data compiled and analyzed by California-based mortgage research firm First American CoreLogic, 19 percent of the more than one million mortgages held in the commonwealth during December 2008 were reported to be "underwater" or "upside-down" - meaning homeowners owed more than their homes were worth. But while Northern Virginia and Hampton Roads continue to struggle with foreclosures, negative equity and sluggish sales, the Richmond metropolitan area and Chesterfield County have so far managed to avoid the worst of the housing crisis. "I think people sometimes get sidetracked by the numbers they hear on the national news," said Kelly Surmacewicz, director of communications for the Richmond Association of Realtors. "I don't want to say it's an insulated market. We see the same things here that people see on the national level, but to a much lesser extent." While First American CoreLogic's data showed the rate of foreclosures in the Richmond metro area nearly doubled (from 0.40 percent to 0.70) in December compared to the previous month, that number is still less than half of the national foreclosure rate of 1.7 percent. "It's definitely been the consensus that our market isn't nearly as bad as a lot of other places. Things are still moving," said Jennifer Mulligan of the Ellen Clark Team at Re/Max Commonwealth Group. In fact, some areas are still very much in demand, like the 23114 zip code. While Chesterfield home resale prices fell by an average of 4 percent over the last 12 months, homes in the Midlothian area actually sold for 0.2 percent more. Quality schools, medical care, low crime rates and a wide range of home prices are the most frequently cited reasons for the 23114 area's continued popularity. So, how to explain the significant statistical differences (foreclosures, home values, etc.) between the rest of the Richmond metro area and other parts of Virginia? "Historically, homes here hold their value very well," Surmacewicz said. Patricia Clark, the third member of the Ellen Clark realty triumvirate, has another theory: It's all about the jobs. According to a report on the 2008 Central Virginia area housing market prepared by two members of the George Mason University Center for Regional Analysis, effects of the nationwide recession have been less severe in the Richmond metro area. The local economy actually expanded through most of last year and the unemployment rate of 5 percent still trailed the national rate by 2.2 percent. Fueled by increases in the services, government and leisure/hospitality sectors, the area added 2,800 jobs in 2008 despite several well-known companies closing their doors for good. "Our economy is more diverse than other areas, so we haven't had the major layoffs," said Wayne McClellan, who teaches several real estate courses as an adjunct faculty member at John Tyler Community College. First-time homebuyers are also helping keep the local housing market afloat during the current downturn. Attracted by record-low interest rates and the Obama administration's new $8,000 tax credit, Mulligan sees more renters being drawn toward purchasing a home with each passing day. These new homeowners won't solve the problem of the existing inventory of foreclosed homes, however. "First-time homebuyers are a little wary of foreclosures and short sales because most of those houses are sold 'as is,'" Mulligan said. "You can get in one of those homes for far less than the assessed value, but you're probably going to have to spend money to fix it up." Foreclosed homes act as a drag on home values throughout the neighborhoods in which they are located. So do homes vacated through a "short sale," in which the lender agrees to accept less than is owed on the mortgage. An average of 14,000 homeowners statewide slid into a negative equity position during the fourth quarter of 2008. With more than 11,000 Richmond-area mortgages on the brink of negative equity, according to the First American CoreLogic data, the possibility exists for many more foreclosed and short sale properties to hit the local market in the coming months. "The accelerating share of negative equity, combined with deteriorating economic conditions, means that mortgage risk will continue to increase until home prices and the economy begin to stabilize," said Mark Fleming, chief economist for First American CoreLogic. Chesterfield County foreclosure filings
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