VOL. 128 | NO. 12 | Thursday, January 17, 2013
By Andy Meek
The Crowne Plaza Hotel at 300 N. Second St. sits on a little less than two acres near Interstate 40. The Shelby County Assessor of Property’s 2012 appraisal for the 11-story, 244-room hotel was $6.6 million.
The Crowne Plaza Hotel at 300 N. Second St. highlighted the local foreclosure market when the Downtown property sold for $9.4 million in December following foreclosure. Overall, the foreclosure market saw a slight increase in 2012.
(Photo: Lance Murphey)
The hotel also is one example among many of something that got a little worse over the past 12 months: the number of foreclosures in the Memphis area.
The hotel sold on the Shelby County Courthouse steps Dec. 28 for $9.4 million following a foreclosure. The previous owner, Genwood Memphis I LLC, had defaulted on a $17.7 million leasehold deed of trust, security agreement and fixture filing though General Electrical Capital Corp. dated Aug. 17, 2007.
That sale on the courthouse steps came at the end of a year in which the number of area foreclosures rose almost 5 percent. From 2011 to 2012, residential and commercial foreclosures in Shelby County climbed from 4,108 to 4,301, according to real estate information company Chandler Reports, www.chandlerreports.com.
Residential foreclosures climbed from 3,992 in 2011 to 4,201 in 2012. Commercial foreclosures dropped a little during that same period, from 116 in 2011 to 100 in 2012.
The foreclosure level is likely to take on increased significance in 2013. This year is a countywide reappraisal year, meaning every property’s value in Shelby County will be adjusted to bring it closer into line with its current market value since the last reappraisal four years ago.
Foreclosures complicate that process somewhat, because those properties have a kind of halo effect on home values around them and make it more difficult – and all the more important – for the assessor to give an accurate recording of values.
The foreclosure data, it should be noted, are especially noisy when it comes to local patterns of foreclosure. From 2010 to 2011, the number of foreclosures took a big slump (a 14 percent drop), though it arguably was an artificial one. But the reasons beyond that drop go on to affect 2012.
Some banks were moving more slowly in 2011 in processing paperwork. Some borrowers were taking all manner of extraordinary steps to hang on to their home, avoiding a foreclosure auction by pursuing mortgage modifications. Then there was the fact that banks were making fewer loans – which means, of course, fewer loans that go bad.
So it might not necessarily suggest, for example, a clean increase in foreclosure activity because of 2012’s 5 percent gain off of the outlier year of 2012. But no matter; Tim Bolding, executive director of United Housing Inc., says it’s pretty simple:
If foreclosures haven’t gone up too much, it also means the problem still isn’t getting better.
“Let’s put it this way. Stable means it hasn’t gone down,” Bolding said. “This is why we see prices still so flat. There’s too many of them still coming in. We’re running this Hardest Hit Fund Program over here, which is a kind of foreclosure prevention to help folks that have lost income by giving them a forgivable loan. It’s to bring their mortgage current and pay on it for up to 36 months or until they get their job situation back.
“We’re scheduled to close 16 of those this week. And we’ve closed over 200 of them already. Every one of those is a foreclosure avoided. The demand for this is just incredible.”
Shelby County’s 4,301 foreclosures in 2012 included residential properties owned an average of about eight years before the foreclosure. The 2012 residential foreclosures included 1,048 conventional fixed-rate mortgages and 433 conventional adjustable-rate mortgages, among foreclosures for which a loan type was known.
When it comes to foreclosure notices – the first warning that a home is in danger of being seized by a bank or lender – that pattern was unmistakable: widespread decline. An increase in foreclosure notices from 2011 to 2012 was evident only in two ZIP codes: 38106 (West Person/Elvis Presley) and 38028 (Eads).
Most of Shelby County’s 30 or so ZIP codes saw an increase in their number of foreclosures between 2011 and 2012. Some of the biggest increases were found in the 38016 ZIP code of West Person/Elvis Presley (47 percent, from 68 foreclosures in 2011 to 100 foreclosures in 2012) and the 38112 ZIP code of Rhodes College (33 percent, from 54 to 72).
Chandler Reports is a division of The Daily News Publishing Co. Inc.