Foreclosure sales rise in Kent County

January 4, 2011
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The Kent County Sheriff's Department conducted more foreclosure sales through the first 11 months of 2010 than in all of 2009.

From January of last year through November, the department auctioned 3,189 properties. In 2009, 3,148 Sheriff's sales were recorded with the Kent County Register of Deeds. If the December sales figure matches the year's monthly average of 290, then 2010 will have 3,479 sales — the second highest total since 2004. There were 3,955 sales in 2008, the most in the last seven years.

Kent County Chief Deputy Register Jerome Czaja told the Business Journal that the December 2010 sales total would be available in a matter of days.

There were 258 Sheriff's sales in December 2009, 262 in December 2008, and 244 in December 2007.

Sheriff's sales account for mortgage foreclosures, but not for all property defaults. The county auctions only include transactions that have made it completely through the process and have been recorded as Sheriff's deeds with the register's office. Homeowners who turn over the keys and walk away, or sign over a deed to a mortgage lender aren't included in the count. Neither are tax-foreclosed properties.

Kent County Treasurer Kenneth Parrish told the Business Journal that the number of Sheriff's sales through November didn't surprise him.

"The tax-foreclosure situation was in a similar situation where the 2010 number was higher than the 2009 number. So it makes sense to me that the mortgage foreclosures would be on a similar path," he said.

There were 144 tax foreclosures last year, up by 41 percent from the 102 recorded in 2009. While individuals and the governing taxing units normally purchase tax-foreclosed properties, lenders are the primary buyers at Sheriff's sales.

"The mortgage holders typically buy at the Sheriff's sale. Very rarely do you see someone other than the mortgage holder make a purchase," said Parrish.

RealtyTrac, the online service that follows the nation's housing market, reported that there were 788 foreclosure filings in Kent County, a number it posted on Dec. 23. RealtyTrac said 529 filings were made in Grand Rapids in November — meaning one of every 288 homes in the city were involved in the default process. Fifty-two percent, or 277, of those filings were in three zip codes: 49503, 49504 and 49507. RealtyTrac said the average foreclosure sale price in Grand Rapids was $72,993 in November.

RealtyTrac, based in Irvine, Calif., predicted in late November that foreclosure filings across the country could reach as high as 4 million this year. Default actions are expected to pick up nationwide before the first quarter closes at the end of March.

The Kent County Land Bank Authority, which Parrish founded and the county established last year, is likely to become more involved with tax-foreclosed properties this year once its funding sources are in place. Local foundations are expected to get involved. Parrish said he believes the land bank will acquire several properties by the end of this year and have sold some or all of those properties to appropriate buyers.

Parrish said he couldn't say whether the number of mortgage-foreclosed homes would rise or decline this year. But he pointed to one indicator that could mean there will be fewer tax foreclosures in 2011, and if there are fewer tax foreclosures, then there may also be fewer mortgage foreclosures.

"A predictor of the tax-foreclosure number is the tax-forfeiture number, and that is the properties that are delinquent a year prior to foreclosures," said Parrish. "The forfeiture number in 2010 actually went down from the prior year. So, hopefully, that means we will have fewer foreclosures in 2011 than we had this past year."

Nearly 19,000 Sheriff’s sales in county since 2004

Foreclosure sales conducted by the Kent County Sheriff’s Department from January 2004 through November 2010 totaled 18,805 — an average of 2,686 sales each year. The biggest leap in sales occurred in 2006, when the housing market was beginning to fall apart. The next largest jump came the following year in 2007, when the market crumbled. The year with the most sales was 2008, when the economy worsened and the financial market came close to disintegrating.


Year
2010*
2009
2008
2007
2006
2005
2004

 

Sheriff’s
Deeds Total
3,189
3,148
3,955
3,344
2,478
1,427
1,264

 

Yearly
Total Change
+41
-807
+611
+866
+1,051
+163
NA

 

Yearly
Percent Change

+1.3%
-20.4%
+18.3%
+34.9%
+73.6
+12.9%
N/A

*2010 number is from January through November.

Source: Kent County Register of Deeds, December 2010

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