Prince George’s was one of the hardest-hit counties in the country during the foreclosure crisis — and housing there will remain troubled for some time, experts say.
More than 2,000 foreclosures were recorded in the county in July, according to foreclosure data company RealtyTrac. That’s up nearly 15 percent from July 2009. Last month, nearly one-third of all foreclosure filings in the Washington area took place in Prince George’s County.
More foreclosures are likely, said Mike Cerrito, president of the Prince George’s County Association of Realtors.
“Part of what’s going on is [that] the backlog to process foreclosures is slowing down getting them on the market,” he said. “If they could get them on the market faster while the interest rates are down, we could move them a little bit faster.”
The county has a little less than six months of housing inventory available now.
Processing delays are not the only thing slowing the resolution of the foreclosure crisis in Maryland. The state placed a moratorium on foreclosures at the height of the crisis in 2008.
“It kind of delayed the market working through the problem,” said John McClain, senior fellow and deputy director of the Center for Regional Analysis at George Mason University.
Prince George’s County is one of only four counties in the Greater Washington area where foreclosure filings were higher last month than they were the year before, RealtyTrac figures show. The other three, Calvert, Charles and Frederick, are also in Maryland.
Cerrito said he’s been told anecdotally that 60 percent of sales in Prince George’s County involve distressed properties. More exact data is difficult to come by because of the freedom listing agents have in classifying properties for sale.
Prices continue to drop, but they are dropping at a slower rate and “trending towards leveling off,” Cerrito said. Completed contracts have remained fairly consistent, ranging from the high 700s to mid-800s every month, aside from March and April, when buyers lined up to take advantage of the $8,000 federal tax credit for home purchases.
Federal Housing Administration loans make up the majority of financing being used right now. Those loans can only be used for homes that are livable, and Cerrito said many foreclosed properties are not move-in-ready. Investors, therefore, play a key role in moving inventory.
“The investors have a huge advantage when the property is in bad condition,” he said. “Many of the foreclosures are in such bad condition, the average buyer can’t buy them because they need too much work.”
