North Texas home foreclosures are down more than 50 percent from a year ago, a dramatic turnaround in the number of distressed houses in the area.
Fewer than 2,000 Dallas-Fort Worth homes are threatened with forced sale by lenders next month, says Addison-based Foreclosure Listing Service. That’s the lowest one-month total for local foreclosure filings in almost a decade.
A stronger North Texas economy and continued migration of new residents from outside the area has boosted the home market enough to quell foreclosures, analysts say.
The size of the drop in foreclosure postings in the area has caught market analysts and real estate agents by surprise.
“There are a lot fewer short sales and distressed home sales, too,” said George Roddy Jr. of Foreclosure Listing Service. “A lot of the owners who have been upside down in houses are now being able to sell because the market values have risen.
“And buyers are willing to pay more,” Roddy said.
There had been fears of an uptick in foreclosures in the early months of 2013 as lenders sorted through a backlog of problem properties.
Instead, D-FW home foreclosure filings are down both for March and the entire first quarter. There have been 44 percent fewer foreclosure filings so far this year than during the same period of 2012, according to data from Foreclosure Listing Service.
The drop in foreclosures is part of an overall brighter housing picture.
Local home sales are up more than 20 percent. And prices could increase at double-digit rates in 2013.
“We are at a point in the market that if you were having a challenge on your house, you have an incentive to work things out with your lender to avoid foreclosure,” said Ted Wilson of Dallas’ Residential Strategies Inc. “You are not as far upside down in the property, and there is light at the end of the tunnel if you need to sell something.”
For March’s foreclosure auctions, the number of homes facing a forced sale in Dallas County is down 63 percent from a year ago. Foreclosure filings are 53 percent lower in Collin County, according to Foreclosure Listing Service.
The houses threatened with foreclosure sale next month in the D-FW area had an average original mortgage value of $147,915.
Todd Mark of Credit Counseling Services of Greater Dallas said Wednesday that calls his agency gets about home loan problems are down more than half from where they were at the worst of the recession.
“The problems have not entirely gone away,” Mark said. “But certainly we have seen them diminish.
“The No. 1 attributing factor is as unemployment shows signs of improvement, you have better abilities to handle housing issues,” he said. “We have been seeing jobs added to the economy, and Texas has been better off than most parts of the country.”
Real estate agents who sell previously foreclosed houses say they have seen a substantial decline in distressed homes this year.
“Who would have ever thought that from last year to this year it would be like this?” said agent Connie Zetterlund of Coldwell Banker. “The market has changed very fast.
“People are fighting to buy these houses, and everything I am getting just flies out the door,” she said.
During the fourth quarter of 2012, the average markdown for a previously foreclosed home was less than 20 percent in the Dallas area, according to a report by Mississippi-based FNC Inc.
“Foreclosure prices have bottomed out in recent months, and the foreclosure market has stabilized while underlying home values are rising,” researchers with the mortgage firm said in the report.
“Foreclosure prices are at a 10-year low when the sizes of foreclosed homes are factored in.”
And resales of foreclosed properties make up a much smaller portion of the D-FW home market.
In the fourth quarter, only about 12 percent of the houses sold in the area were previously foreclosed. These types of sales accounted for more than a third of the total housing market in North Texas at the worst of the recession.
The drop in foreclosed houses offered for sale has also contributed to the steep decline in total inventories of homes for sale in the D-FW area. In January, there was less than a four-month supply of houses on the market.
Foreclosure Listing Service’s Roddy said he wouldn’t be surprised to see local foreclosure filings increase slightly.
“I think it will go back up in May and June — that’s typically our highest month,” Roddy said.
Still, don’t expect the foreclosure volumes to get anywhere near recent highs, he said.
“Those days are gone,” Roddy said.
Some problem mortgages still remain to be resolved.
Zetterlund said she still gets properties to sell from mortgage companies that fall far behind in taking over the property.
“I just did an eviction with people who had lived there a year and a half since the foreclosure,” she said. “Maybe they just get lost in all the paperwork.
“I guarantee there are more out there.”