Fayetteville Arkansas, University of Arkansas--Old Main Overview

Fayetteville Arkansas, University of Arkansas--Old Main Overview
Overview of Fayetteville, AR

Tuesday, March 04, 2008

Recent Reports Add Confusion to Foreclosure Statistics in NW Arkansas

It’s hard to get accurate data on foreclosures in Arkansas these days. The national media would have us think that every home on the market is being foreclosed on so all buyers need to do is make a "low-ball" offer and get a "steal," but it’s not true. Regular homes for sale are still maintaining fair prices, and although homes are no longer appreciating in NW Arkansas at the double digit appreciation rates of the past few years, they aren't depreciating either.

Awhile back I had some data which indicated that the foreclosure rate in Arkansas was actually lower recently, but now I have some new, but confusing information.

According to my new information, the 2007 foreclosure rate in Arkansas was 26.44% higher than 2006 according to Realty Trac, a well known company that maintains a database of more than 1 million properties nationwide that are in various phases of foreclosure. These statistics include default notices, auction sales, and repossessions.

The report showed 14,310 foreclosures in Arkansas last year, up from 11,318 in 2006, which ranks Arkansas 26th in the country.

States with foreclosure rate increases in excess of 200% include California, Delaware, Maryland, and Nevada. (The 200% is not a typographical error.) Washington, DC topped all the states with a whopping 608% increase!

Overall, nationwide foreclosure filings increased 79% in 2007 over 2006. Comparatively speaking, Arkansas looks pretty good with an increase of “only” 26%.

Nationwide, more than 1% of households were some stage of foreclosure. The foreclosure rate in Arkansas for 2007 is 0.51%, again a rather respectable ranking compared to many parts of the country.

Within Arkansas, foreclosure rates vary greatly by county. For example:

*Benton County saw a 105% increase, from 905 in 2006 to 1,855 last year. To put that in perspective, there was one foreclosure for every 41 households.

*Washington County increased 108%, from 567 to 1,177, - one foreclosure for every 65 households.

*Sebastian County (Fort Smith area) had a 4% drop in foreclosures, yet that was one foreclosure for every 66 households.

*Crawford County (Van Buren area) rate dropped 13% but that was one foreclosure for every 64 households.

Thus, you can see, simply looking at the rate of increase/decrease is not indicative of the number of households affected.

The official records of Benton County show only 509 foreclosures in 2007, down from 541 the preceding year. Two things can explain the discrepancy from the 1855 stated by the reporting firm and the county’s figure of 509:

The reporting firm included both judicial and nonjudicial foreclosures. In judicial foreclosures, the sale of the property is administered by the court system. In nonjudicial foreclosures, the sale is handled by an appointed trustee and filed with real estate records, which keeps it out of the Arkansas courts. Beginning January 1, 2008, a change in law requires nonjudicial foreclosures to be filed through the court system.

The reporting firm also included properties that may be only in default but counties do not record defaults. Thus, many of the defaults of fourth quarter 2007 won’t be included in county records until foreclosures enter the legal system in 2008.

So we don't know how many foreclosures there really are in NW Arkansas. But there are a bunch.

The bottom line here is that for buyers there may be some really good dealsfor buyers out there if the home they want to purchase is a “bank-owned” property. Foreclosed properties listed by realtors generally try to recoup what the bank has lent, so the list price may be substantially less than other similar homes in the same neighborhood. A clue to whether this may be the case is that MLS public remarks usually say something like “corporate owned” in the description.

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