The number of Washington-area foreclosures are falling, but there will be more to go before the market is fully recovered.
Stephen Fuller, director of the Center for Regional Analysis at George Mason University, says there will be more foreclosures, but far fewer than the economy-shaking deluge of 2008 and for a different reason.
“We expect there will be a second wave, but nothing of the magnitude we saw in 2008,” says Fuller. “That wave was tied to subprime lending. This one will be more of a result of an extended length of unemployment.
“The Washington area does not have the significant magnitude of unemployment like some other areas of the country,” he says, “but we do have 100,000 more people unemployed than we did a year ago.”
As a result, the jurisdictions experiencing the highest number of foreclosures changed somewhat. The first wave of foreclosures two and three years ago hit Virginia’s Prince William County hard. While three ZIP codes in Woodbridge, in Prince William County, still lead the area in the number of foreclosures, all three locales showed a 20 percent-plus improvement in foreclosure filings when compared with April 2009.
Meanwhile, four of the area’s top-10 foreclosure ZIP codes are in Prince George’s County, including spots in Fort Washington, Upper Marlboro Hyattsville and Capitol Heights, according to RealtyTrac, a foreclosure analysis and statistics firm.
“Prince George’s County is the new epicenter of this,” says Fuller. “It still has significantly declining property values.”
In Germantown, in Montgomery County, there were 229 foreclosure filings in April, a 71 percent increase from the previous month.
However, Raymond Skinner, secretary of the Maryland department of Housing and Community Development, says the worst might already be over for Maryland. Foreclosures in Maryland dropped 11.5 percent between the fourth quarter of 2009 and the first quarter of 2010. There were 14,885 Maryland foreclosures in January to March of this year, including notices of default. There was a 25.4 percent decrease in Prince George’s County and a 24.2 percent decrease in Montgomery during that time period.
One reason the number of foreclosures in Maryland seems to be falling at a slower rate — as well as increasing in some areas — is state programs introduced to forestall the process, Skinner said in a panel discussion at the annual Affordable Housing Conference of Montgomery County Summit earlier this month.
The Maryland General Assembly passed legislation in 2008 that, among other things, lengthened the foreclosure process from 15 to 150 days.
“The Maryland legislation pushed everything back a year,” Fuller said.
