Archive for the 'Minnesota Articles' Category

Economists have reported that the housing market of Minnesota is still reeling from the effects of the high number of bank and VA foreclosures and is still in a distressed state. Employment and home values are still down, despite the fact that the state's foreclosure rate is currently at its lowest level in two years.

The high number of properties in Minneapolis foreclosure auctions and in other areas of the state has held back home building activities, economists have stated. This resulted in employment in the home building sector dropping below the monthly mark of 9,000 during the 2010 fourth quarter; the lowest quarterly level for employment in the sector in the past 17 years.

Experts also blamed Minnesota home foreclosure auctions and high inventories of unsold properties for the continuous decline in property values and prices in the region. They argued that the oversupply of residential properties, particularly low-priced foreclosed houses, is hurting the home construction industry and the values of residential properties in the state. Furthermore, Minnesota is facing an increasing number of homeless people, particularly among the youth, with a big percentage of them accounted for by people who lost their homes to foreclosure during the start of the housing market crisis and up to the succeeding nationwide recession.

The decline in the state's foreclosure rate and the drop in the number of bank and VA foreclosures might have been good news, but experts warned that the decrease in foreclosure numbers was more likely a result of the documentation controversy that emerged last year, which put a temporary hold on the processing of foreclosures in almost all parts of the country.

Another sign that home foreclosures auctions are still hurting the housing industry and the overall economy is the rapid decline in rental home vacancies in the state, experts have revealed. In the Twin Cities, vacancy rates have gone down to lower than 4%, a level that is considered unhealthy since it demonstrates an imbalance between available housing and number of renters. Analysts explained that when vacancy rates are this low, rental rates are likely to increase, something that will further burden the finances of households that are already stretched with paying for housing costs.

Despite all these negative developments, economists are seeing some hope that the number of bank and VA foreclosures will somewhat ease down in the coming months as mortgage delinquency declines in Minnesota. The latest report showed that round 6% of homeowners in the region are at least two months behind on payments.

The growing number of foreclosure homes has alarmed city officials in Burnsville to move and identify the properties. This is to make sure that foreclosure properties are maintained properly if the city is to be forced to take responsibility for the vacant homes.

The City Council is to consider an adoption of an ordinance that would require registration of foreclosures in the city so that they could be maintained while they are vacant. These foreclosure properties will be inspected prior to its re-occupancy as well.

The community development director of Burnsville stated that the city has to make sure that the neighborhood is maintained including the homes that people may want to live in. The said proposals are in line with the state’s program for Minnesota foreclosures.

In the city of Burnsville, foreclosures reached 258 sheriffs sales all through the end of October this year. Burnsville also reported that there were about 220 foreclosures out of the 15,000 city homes this year.

Burnsville is yet another reflection of the housing crisis that the nation finds itself in. Not all homes would really end in sheriffs sales, 382 homes in the city ended in default by the owners and legal notices were filed by lenders.

The Burnsville local government said that they are not immediately notified of foreclosures and vacated properties. Mayor Elizabeth Kautz called on residents to keep an eye on the neighborhood and inform staff members of the city if a property had been vacated or abandoned.

According to Mayor Kautz, this is a strategy to maintain the quality of neighborhoods and to enforce public safety as well. She stated that unmaintained houses, with overgrown lawns and flower boxes can attract thieves. Thieves may break in the repossessed homes and steal objects, flood homes, cause explosions or trash the property.

Banks who own the repossessed homes will be required to pay a minimal fee and register the property to the city. The local government will keep a database of the foreclosures. Record keeping would also in identifying the growth of Minnesota foreclosures.

Utilities will be shut off, unless the owner will pay the bills and the property will be inspected by the city before occupancy to make sure it is safe. This is to identify certain deviancies such as rotting doors and windows or overgrown lawns.

This course of action is to send a message that the city is concerned with its neighborhood. Furthermore, Mayor Kautz will support programs that will avoid this problem and help owners prevent foreclosures.