Sacramento County Foreclosures Worsens the Neighborhood

November 24th, 2008

Sacramento County Foreclosures Worsens the Neighborhood
Sacramento County is passing through one of the worst phase of foreclosure. The real estate has been hit hard creating a big housing crisis in the region. The condition there is very unstable. According to SHRA redevelopment analyst Joel Riphagen, “Foreclosures are continuing to increase. The common denominator of the hardest-hit areas is they are low-income.” It has been found that the sales price of homes in a few neighborhoods have come down to half over the past one year. Apart from that, the bank repossessions have been instrumental in raising the stakes for the Sacramento County. Supervisor of Sacramento County Jimmie Yee said, “What we don’t want to happen is when these homes become vacant, the outside becomes dilapidated and run-down,”

This county has witnessed nearly 14,054 bank repossessions from January to September. Out of these, 5,643 homes were taken over by the banks in the months of July, August and September alone. It accounts for 73.5 percent of the total of the capital region. According to SHRA that does not take into account the homes purchased at the auction, has shown about 4,670 foreclosures in the third quarter. The maximum effect of foreclosure has been felt in the neighborhood area of south Sacramento like Parkway and Meadowview, and north Sacramento areas of Foothill Farms and North Highlands.

According to another data, the problem of foreclosure is also highly concentrated in Natomas. Roger Dickinson, Sacramento County Supervisor, said, “When you have a large number of foreclosures in a relatively small or confined geographic area, the market starts to look at the area as struggling and less desirable. That can have an impact on the property values of people who are still there.” When there was stability in the real estate market, the homeowners in a bid to buy homes fast took loans at risky adjustable-rate mortgages. The borrowers were hoping that they will be able to refinance as soon as the value of their homes will go up and now they are in utter despair.

Those neighborhoods with low income people have witnessed huge spikes in the home sales activity as the prices of homes have gone down. What the investors are doing is that they are snatching away homes from the homeowners for renting them out. In the month of October, above one-third of the home sales in Sacramento County were valued below $160,000. Nearly three-fourths of the sales of this county were homes facing foreclosure.