The number of foreclosures in Frederick County may have dropped in June, but that doesn't mean the housing crisis is over."The subprime mess is on its way out. Now we are starting to see the unemployment impact," said Stephen "Buzz" Mackintosh of Mackintosh Inc. Realtors.
Realtytrac, a California-based monitor of foreclosures, said the number in Frederick County fell to 142 in June, compared with 185 in May.
It is no longer the creative loans faltering, Mackintosh said, but consumers who had been paying their mortgages on time now faced with losing their house.
"Fifty-six percent of foreclosures are now on fixed-rate mortgages," Mackintosh said. "That is the effect of people losing their jobs."
The Frederick area "is not one of the worst in the nation" facing foreclosures, Mackintosh said. While numbers dropped in June, the Realtor said there is a shadow of foreclosures that could be coming from those who were good mortgage payers.
"We've not turned the corner on this. There is a bit of a storm to get through," Mackintosh said.
Wayne Six, an appraiser and owner of Six & Associates, said he doesn't see the drop as a trend.
"Foreclosures are still prevalent," he said.
Nationally, more than 1.9 million foreclosures were filed through the first half of 2009, up 9 percent from the previous six months and up 15 percent from the first six months of 2008.
Realtytrac said 336,173 foreclosures were filed nationally in June, with 3,100 of them in Maryland. California led the June list with more than 101,000 homes in foreclosure. Florida was next with nearly 53,000 and Arizona at nearly 17,000 homes in foreclosure for June.
"In spite of the industrywide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues on record levels," said James J. Saccacio, CEO of Realtytrac.
Unemployment-related foreclosures account for much of the increased activity, he said.
"The high number of borrowers who find themselves owing more on their mortgages than their homes are worth represent a potentially significant future risk," Saccacio said.
Stemming the tide of foreclosures is a critical component to stabilizing the housing market, he said.
"It is imperative that the lending industry and the government work in tandem to find new approaches to address this issue," Saccacio said.
One bright spot for the local real estate industry is that inventory is down. With housing prices having fallen, sales have increased, many of the sales from foreclosures and short sales, Mackintosh said.
A federal first-time buyer program -- which gives initial buyers or those who have not owned a home in at least three years an $8,000 tax credit ----has helped.
"For those sitting on the fence (about buying a house), this is the time to do it," Mackintosh said. "Interest rates are going to increase. With the various programs available and house prices at these levels, it is the time to consider buying a house."
The average price for a home sold in Frederick County in June was $278,244, down nearly 20 percent from a year earlier and down more than $9,000 than in May.
June's inventory of Frederick County homes on the market was 1,740, according to the Maryland Association of Realtors, down from more than 2,300 from a year ago and 35 less than in May.
By comparison, there were 408 foreclosed homes in Montgomery County, 112 in Washington County and 57 in Carroll County in June.
The highest number was in Prince George's County at 1,344; the lowest was in Somerset County at four.
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