Residential foreclosures dipped slightly in Denton County for the first six months of this year compared to 2010 - a trend that, coupled with a lowering unemployment rate, shows signs of an improving economic outlook.
For the first six months, residential foreclosures in Denton County dropped 3 percent from 3,647 in 2010 to 3,537 this year. Second-quarter numbers show Denton had 8 percent fewer foreclosures during April through June compared to the same period last year. For June alone, foreclosures declined 1 percent, from 554 posted for auction last June to the 547 posted for the upcoming June foreclosure auction, according to Addison-based Foreclosure Listing Service Inc.
The trend is what some say they've been waiting for.
"This is definitely better than what we've seen in the last three to four years," said George Roddy Sr., president of Foreclosure Listing Service. "If these trends hold out … then the market may start to rebound."
"We're seeing some stabilization," said Terry Clower, director of the Center for Economic Development and Research at the University of North Texas.
Denton's unemployment rate dropped two-tenths of a percentage point, from 6.4 percent in March to 6.2 percent in April, according to the Texas Workforce Commission.
"In terms of the numbers, job creation in the private sector has helped to provide some cushion as the public sector has dropped," Clower said.
Roddy cautioned that while the drop in foreclosure postings is good news, much of the area's housing inventory remains on the books.
"You've got a huge glut of properties that, if they were put on the property market at the same time, you would see a substantial degradation of value," he said. "The fact is the actual numbers we're seeing, and especially for the last two months, may be a little clouded."
Another factor could be a slower turnaround of foreclosure postings due to "robo-signing" allegations that surfaced last year, leading foreclosure-related filings to drop quickly across the country.
"The banks and mortgages have slowed way down due to the robo signings," Roddy said. "It takes longer."
Clower said he had anticipated an upswing in foreclosures following last fall's slowdown in processing. But even if foreclosures rise in the coming months, "it does not mean things are getting worse in the economy," he said.
"These foreclosures are starting to work their way through the market," Clower said. "Under any circumstances, foreclosures are going to stay up for another year."
While Denton County has seen a slight dip in foreclosure numbers, neighboring counties are registering 7 percent to 11 percent drops. Collin County, which has historically run almost neck-and-neck with Denton County in foreclosure postings, has shown a significant decline in the number of residential foreclosures in the past six months, dropping 11 percent from 4,232 last year to 3,768.
One reason for the difference, Roddy said, is that Denton County foreclosure properties are located in outlying areas with starter homes.
"You've got areas that have been hit harder because of the value of the properties themselves," he said, adding that starter home properties not located in central business areas could be harder to turn around.
The foreclosure numbers and unemployment figures are positive signs that the recovery is on the mend.
"It's a slow recovery," Clower said. "With foreclosure numbers, it's one more checkmark on the good news recovery ledger."
A true sign of recovery will be in new home sales, the economist said.
"The availability of distressed and foreclosed properties is part of what's impacting the sale of new homes," Clower said.
He noted that new home sales spur spending across many markets, including home decor and hardware stores and other discretionary spending.
"That's why we follow the new construction/home sales economy, because it drives so much," he said.
DAWN COBB can be reached at 940-566-6879. Her e-mail address is dcobb@dentonrc.com .
