VOL. 127 | NO. 204 | Thursday, October 18, 2012
Foreclosures Continue Rise in Third Quarter
By Andy Meek
At a public gathering at Calvary Episcopal Church last week, the city’s Housing and Community Development director Robert Lipscomb lamented the pervasiveness of poverty in Memphis.
Meanwhile, during a Memphis City Council committee meeting Tuesday, Oct. 16, that focused on blighted real estate in the city, one attendee warned about a massive so-called “shadow inventory” of homes.
Essentially, those are homes with a mortgage likely in default and which an owner might not be living in, with foreclosure looming.
That potent mix of poverty and blight helps underscore why foreclosure levels remain elevated in Memphis and Shelby County. During the third quarter, the number of foreclosures continued to rise at almost the same pace it did during the second quarter.
There were 965 foreclosures between July and September, up from 932 during the same period in 2011, according to real estate information company Chandler Reports, www.chandlerreports.com. That’s an increase of almost 4 percent.
Areas around the city that saw some of the biggest increases in foreclosure activity included Rhodes College’s 38112 ZIP (a 109 percent increase from 11 in the third quarter of 2011 to 23 in the third quarter this year), Southeast Shelby County’s 38125 ZIP (from 46 to 76) and the West Person/Elvis Presley Boulevard 38106 ZIP (from 14 to 22).
At the public meeting last week, Lipscomb called it “unforgivable” that some 160,000 people in Memphis live in poverty.
“We can tackle and resolve to eliminate poverty,” he said. “Our real challenge is poverty.”
Memphis’ jobless rate stood at 8.9 percent in August – still high considering the U.S. recession was declared officially “over” in 2009. One year earlier, the jobless rate in Memphis was higher – 10.3 percent.
Holly Swogger, president of Memphis Investors Group, thinks banks are unquestionably dragging their feet on some unknowable amount of foreclosures, to the extent that the scope of the problem in the Memphis area is actually worse than the numbers make it look.
“It’s hard to quantify, but the number that was thrown out (Tuesday at the City Council) was there’s 63,000 foreclosed homes in Memphis right now,” she said. “And you do something like double that to get the shadow inventory.”
“There’s just something about houses – you can tell which ones are part of the shadow inventory. For me, it’s like the soul has gone out of it. When a house is vacant, you just know. It might be that the grass is overgrown. Maybe a Yellow Pages sitting on the porch or in the front yard.”
She said that kind of thing is prevalent in Frayser, which saw a 16 percent increase in foreclosures over the third quarter periods (from 56 last year to 65 this year).
“Sometimes it can be whole streets,” she continued. “Berclair has vacancies like that. So does the area around Jackson Avenue and Chelsea Avenue”
Swogger predicts more real estate-related activity, including investment purchases, are likely to pick up steam after the presidential election and that right now, in her opinion, there’s a feeling of risk aversion.
The quarter’s pace of foreclosure activity rose at about the same rate as it did the previous quarter. There were 1,095 foreclosures between April and June, up from 1,045 during the same period in 2011, a five percent increase.
One bright spot, if it could be called that despite the still-high numbers, is the fact the amount of foreclosure notices filed during the quarter went in the opposite direction. Foreclosure notices fell during the same period quarter-over-quarter from 2,115 to 1,938.
Chandler Reports is a division of The Daily News Publishing Co. Inc.