By DON FENLEY

TRI-CITIES, Tenn. – January’s foreclosures filings were up from December in what is likely a legal system’s post-holiday progression. Likely is the key because the monthly spike runs counter to the local trend. The increase is somewhat like the U.S. situation noted in ATTOM’s January report. However, ATTOM CEO Rob Barber says, “other external factors may be at play such as escalating interest rates, inflation, employment shifts and other market dynamics. We remain vigilant in monitoring these trends to understand their full impact on foreclosure activity.”

According to ATTOM, lenders reposed eight local mortgage properties last month, unchanged from December. There were 35 notices of trustee sales, up from 20 in December. Compared to January last year, lender repos were down three properties and noticer of trustee sales were down six properties.

One of the reasons local foreclosures are so low is the strong equity positions for all home owners posted during the runup to the pandemic and the spike in sales and double-digit annual price increase during the past four years. Given current conditions, the price outlook for the NE TN and SW VA market is for another year of higher prices driven by continued high organic and new resident demand and a stubborn lack of inventory.

CLICK ON CHART FOR LARGER FILE

ATTOM’s fourth quarter Equity and Underwater Report found that 57,434 equity rich properties in the region (Johnson City metro area, Kingsport-Bristol, and Greene Co.) were equity rich. Equity rich is mortgaged property where the combined estimated amount of the loan was no more than half of its estimated market value.

Comparing the local equity rich share to the national norm adds context to the wealth local owners have acquired. The U.S. fourth quarter share is 46.1%. The local share is 56.8%, up from 55.6% last year.

On the opposite end of the equity picture are the 2,425 owners who were seriously underwater. That means their loan to value ration is 125% or more, meaning the property owner owed at least 25% more than the estimated property value. Locally, that accounted for 2.4% of the region’s mortgaged property, down from 2.8% last year.

The U.S. share for seriously underwater properties rose to 2.6% in the fourth quarter, another example of the hyper-local conditions in real estate. And that difference afforded property owners with difficulties options to having their properties move into the foreclosure column.

It’s expected that the local foreclosure rate will slowly increase as the market continues to settle into a new normal.

ATTOM is a leading curator of land, property, and real estate data.

Categories: REAL ESTATE