Do You Live In One Of America’s Most Foreclosure-Ridden Towns?

Posted April 23, 2009 - 12:40 by Paul Michael in Real Estate and Housing, Investment, Consumer Affairs

Photo: The Truth About

I’ve seen several houses in my area go into foreclosure over the last 12 months. The economy and over-inflated housing prices, coupled with predatory lenders and some very bad decision-making, have turned something that was once quite rare into a full-blown epidemic. But some places are having it worse than others; much worse. Do you live in one of those unfortunate towns? You're about to find out.

Forbes.com has been working with a company called RealtyTrac (based in Irvine, California) to determine which towns in America have been in the hardest by the foreclosure crisis. This, from Forbes.com:

“RealtyTrac…provided us data for homes that are currently in foreclosure or are bank-owned. To determine the country's hardest hit areas, we measured every region under 100,000; these include areas classified as cities, towns, boroughs, Census-designated places and townships. We elected to call these "towns," as they reflect a smaller regions than a metropolitan statistical area--geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics. These are typically larger groups of regions with a city core.

Unlike a large city, which might have massive foreclosure problems in one area, but is sizable enough that other parts of town are immune, these towns are far less resilient.
The results shocked even me, someone with more than a streak of pessimism coursing through my veins.”

Not surprisingly, towns in California were prevalent in the list, although the top spot for foreclosures actually goes to a small town in Arizona. If you live in one of these 20 towns on the list, that means both good and bad news. Obviously, if you’re a homeowner in one of the following areas, this is pretty crappy for you. Foreclosures directly impact the price of your own home, and even if you’re not planning to sell yet, it makes it very hard to even get a refinance or loan modification.

However, if you’re in the market for a deal and live near (or in) one of these towns, then you could find yourself some real bargains. Properties in foreclosure can be picked up at a steal. It’s a shame you’ll be making good on someone else’s misfortune, but this economy is one huge double-edged sword.

Here’s the top 20 list in reverse order:

20. Tracy, Calif.
People per foreclosure: 110
Population: 81,000
Properties in foreclosure: 610
Properties fully bank-owned: 133

19. Hesperia, Calif.
People per foreclosure: 102
Population: 80,000
Properties in foreclosure: 710
Properties fully bank-owned: 85

18. Los Banos, Calif.
People per foreclosure: 92
Population: 35,000
Properties in foreclosure: 293
Properties fully bank-owned: 87

17. Lake Elsinore, Calif.
People per foreclosure: 88
Population: 49,000
Properties in foreclosure: 476
Properties fully bank-owned: 90

16. Fernley, Nev.
People per foreclosure: 87
Population: 12,500
Properties in foreclosure: 101
Properties fully bank-owned: 45

15. San Jacinto, Calif.
People per foreclosure: 85
Population: 34,000
Properties in foreclosure: 328
Properties fully bank-owned: 80

14. Lathrop, Calif.
People per foreclosure: 82
Population: 17,500
Properties in foreclosure: 167
Properties fully bank-owned: 45

ARTICLE CONTINUES BELOW

13. Adelanto, Calif.
People per foreclosure: 80
Population: 27,500
Properties in foreclosure: 285
Properties fully bank-owned: 58

12. Patterson, Calif.
People per foreclosure: 80
Population: 18,000
Properties in foreclosure: 176
Properties fully bank-owned: 49

11. Maricopa, Ariz.
People per foreclosure: 76
Population: 37,000
Properties in foreclosure: 315
Properties fully bank-owned: 180

10. Heber, Calif.
People per foreclosure: 74
Population: 4,000
Properties in foreclosure: 45
Properties fully bank-owned: 10

9. Perris, Calif.
People per foreclosure: 70
Population: 53,000
Properties in foreclosure: 657
Properties fully bank-owned: 108

8. Buckeye, Ariz.
People per foreclosure: 61
Population: 29,000
Properties in foreclosure: 314
Properties fully bank-owned: 168

7. Olivehurst, Calif.
People per foreclosure: 61
Population: 11,000
Properties in foreclosure: 128
Properties fully bank-owned: 53

6. Fairburn, Ga.
People per foreclosure: 57
Population: 8,500
Properties in foreclosure: 75
Properties fully bank-owned: 75

5. Parrish, Fla.
People per foreclosure: 54
Population: 6,900
Properties in foreclosure: 126
Properties fully bank-owned: 2

4. Lehigh Acres, Fla.
People per foreclosure: 50
Population: 67,000
Properties in foreclosure: 1099
Properties fully bank-owned: 251

3. Litchfield Park, Calif.
People per foreclosure: 44
Population: 5,500
Properties in foreclosure: 82
Properties fully bank-owned: 43

2. Tolleson, Ariz.
People per foreclosure: 27
Population: 6,800
Properties in foreclosure: 188
Properties fully bank-owned: 61

and now, the NUMBER ONE town in America for foreclosures...

1. Queen Creek, Ariz.
People per foreclosure: 25
Population: 20,500
Properties in foreclosure: 533
Properties fully bank-owned: 302

If you do happen to live in Queen Creek, Arizona, please write and tell us how this is affecting you.

Source: Forbes.com

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Comments

There are different rules in different states as far as foreclosure goes. What we are seeing is sad but may be slanted towards states that banks have an easy time foreclosing on. In New Jersey it is VERY difficult for banks to foreclose on a property. I believe it is the hardest in the nation. We may just be lagging behind the other states. This may give us an advantage of time leverage to be able to work with the bank or sell.

You said,

Have you been any of those towns on the list? I have, many of the ones in California. Let me tell you, they aren't places where most would care to live. High Crime, graffiti, unbearably hot weather.

The falling prices haven't bottomed. Not by a long shot. A banker told me only 30% of the bank-owned homes are on the market. The other 70%, the shadow inventory, they aren't yet releasing because they know that will crush the market.

Foreclosures themselves have shot up dramatically after some states' moratoriums have ended.

As far as home prices dropping, you ain't seen anything yet. Keep lot's of powder dry. There will be bargains, but two to five years out.

I live in nearby Gilbert, AZ, about 20 minutes from Queen Creek, 30 minutes from Maricopa, and 45 minutes from Buckeye. That's what the data isn't showing - just how close together each of these towns are. I wasn't surprised at all to see Queen Creek at number one. I was surprised that Maricopa was as low as it was. All three of those towns experienced HUGE growing pains, in the form of increased traffic, not enough public safety personnel, etc. over the last five years, during the investor housing boom. Now, the cities are drowning in debt from these cost, coupled with the loss of tax revenue.

We looked at a couple of houses in Queen Creek a few years ago. The average price for a 1600 sq foot house on a tiny lot was $300,000 or so - $250K was considered a good deal. So, they've fallen really, really far. And it's affecting all of the Metro-Phoenix area, since Queen Creek, Buckeye, and Maricopa are all on the edges of the Phoenix area.

I've driven through some of the California towns on this list. They're mostly fairly far from major job centers. Tracy grew a lot in the last decade because it's an hour or so from San Jose and San Jose got way too expensive, and now Tracy is coming down because San Jose prices are cut in half. Now tracy is infamous for the Sandra Cantu murder and a teen torture case so it's possible that real estate will come down further there.

The value of my home has dropped some $65,000 since late 2006 when we bought it. We also sold our old home that year and made a considerable amount of money on the sale...so you win some, you lose some I guess. At this point, we're anticipating living in this home for a really long time. We can't refinance because we are upside down on our mortgage (despite a big down payment.) We're not in danger of foreclosure (barring disaster or job loss) because we bought a house that we could afford. I think greed on the part of buyers and the lenders coupled with an overinflated market is what led to the current crisis in Queen Creek and the surrounding areas.

Queen Creek also includes properties in Pinal County, AZ. This is unincorporated county land that happens to share our zipcode. I believe the majority of foreclosures are located outside of Queen Creek proper.

Town of Queen Creek (approx 23000 residents) actually has a very low number of foreclosures. The problem is that Town of Queen Creek shares US Postal Service "Place Name" with a much much larger population of around 150,000. So the data shows foreclosures for a much greater population but is only dividing the number by our own Town's population of 20,000 (assume they are using most recent census update)

You are 100% correct in the fact that the data is inaccurate. The ACTUAL percentage of foreclosures within Town of Queen Creek is 2.4%

It's impressive how hard California is being hit, but that always seems to be the case. Whether things are good or bad, the Golden State seems to be at the forefront. One thing that California seems to excel at is this notion of commuter culture and spending huge amounts of time stuck in traffic trying to get from point A to B. It's a horrible way to live, but the cost of owning a piece of the American Dream: a house with a yard. I am not familiar with a lot of the towns you mention, but I knew a number of people who bought houses along with the two hour commutes (one way) in the neighboring towns outside of LA. At some point I wonder if people are not better off just renting closer by rather than buying. More like the New York City model, it all boils down to location.

Let's see . . .

Bad economy . . . check!

Motivated sellers . . . check!

Rock bottom prices . . . check!

Looks and smells like opportunity to me.

I'm renting in Litchfield Park, AZ. I dont think theres a Litchfield Park in California. My neighborhood is a ghosttown.

The reason why these areas suffer foreclosures is because they are distant from centers of job growth... but close enough for a long, unpleasant commute.

People were speculating in these areas, and when the real estate bubble deflated, the owners just quit paying on their pointless mortgages.

The market's still not hit bottom. The pay option ARMs from 2006 won't reset until 2011. Commercial real estate is going to deflate next, due to the recession.

I live in a small town not far from Tracy, Patterson, and Lathrop. These towns grew like cancers in the last decade, turning nice little farm towns into giant subdivisions filled with box-like McMansions, owned by commuters who had zero interest in becoming part of the communities they moved to for the "small town atmosphere".

Apparently, many of these homeowners neglected to learn that knowing your neighbors and being involved with your kids' schools and with community organizations is what makes a small town special. Nobody with a four hour round trip commute has time for that.

It's a shame these towns were ruined by developers with deep pockets to influence the county planners, and sadder still that there is such misery in the wake of the development.

We may have heat in the great central valley, but the other stuff was brought here by people from the Bay Area, chasing bigger houses. Silly people, they foolishly equated more square footage with a better quality of life.

This is the collateral damage of the housing bubble, and it will have lasting repercussions in our area.

One problem that is prevalent in Queen Creek (I am a resident) is the Home owners associations in the neighborhoods with lots of foreclosures. Many of them are struggling too, making the entire neighborhood look bad because they don't maintain the common areas or pay for what is needed. They are also trying to raise the rates for those of us who still live in the neighborhood. When we bought our house 5 years ago we paid $30/month in fees which included basic cable. Last year they raised the monthly fee to $40 and this year they raised it another $10 AND quit paying for our cable. They are trying to make up for all the empty homes. So not only do we have vacant homes as neighbors, we are saddled with run down parks, green pools and HOA companies puting liens on our homes for not paying the exhuberant HOA fees. Who would want to move into a neighborhood like that?

Ohh yeah... you're number one city for foreclosures is my back yard. Queen Creek is full of great opportunities for investors... short sales, nope. I found this resource for foreclosure lists at phoenix trustee sale auctions.

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