By Kelley Atherton
Remote as it is, Del Norte County is not exempt from the mortgage crisis that has rocked the nation over the last year.
The number of local foreclosures has shot up this year as families struggle to either sell their homes or refinance their mortgages.
If there's a bright side, it's the fact that foreclosures make homes more affordable by driving down prices.
"There has been an increase in foreclosures," said Doris Stremberg, who owns the local Century 21. "I think it's leveling off."
Stremberg believes prices have now fallen to where most people can afford to buy a piece of land or a house.
"Prices have come down to where the market should be," she said. "Before, we were pricing ourselves out. The local population couldn't afford a home. Now, young people are starting to buy homes."
Stremberg has been in the real estate business for more than 30 years in Del Norte County and dealt with a number of foreclosures.
She's watched the market change over the decades and said that the housing "climate" has changed over the last year as a result of the economy. Lenders are more willing to help borrowers refinance their mortgage and keep their home, which could quell the number of homes in foreclosure.
"There's a built-in buyer, a family already in the home," Stremberg said. "Why take that away if it could work it out? It makes all the sense in the world."
Foreclosures in Del Norte
One indicator of foreclosures is the number of public auction notices filed with the county. So far this year, there have 58 notices of trustee sales one of the final stages of foreclosure. In 2007, there were 35 sale notices.
There are 26 properties in Del Norte homes that have been foreclosed and are currently back on the market, according to RealtyTrac, an Irvine-based foreclosure listing service. On top of that, 25 properties are in pre-foreclosures, meaning owners have defaulted on their mortgage payments and are trying to unload their homes.
After the notice of default, if the property owner cannot pay the back mortgage payments, the property is then sold at public auction.
Across the nation, the number of foreclosures has increased by than 70 percent compared to 2007. California alone makes up a quarter of foreclosures.
A buyer's market
The increase in foreclosures has caused home prices to drop significantly nationwide. The price for single-family homes dropped 17.4 percent in September from a year ago according to the Standard & Poor's/Case-Shiller Home Price Indices.
This is good for buyers, but not for sellers who now owe more on their home than what it's worth.
It's basic supply and demand, explained Fran Gatti, a real estate agent with Re/Max. Gatti tracks the local housing market on her blog, http://activerain.com/blogs/frangatti.
Homes prices went up when there were lots of buyers and almost everyone could get a loan. Then, people who may not have been able to afford their mortgages in the first place defaulted on payments and either had to sell their homes or they went to public auction. Now, there are more homes for sale than there are buyers out there, driving prices down again.
"What is selling is $200,000 and under that's what is driving the market," Gatti said.
She said that only six houses in Del Norte had sold this month as of Nov. 20, with the median price being $183,000.
A top reason why people cannot sell their home is that the price is too high, Gatti said.
"They don't want to give (the house) away, Gatti said, "but a house is only worth what someone is willing to pay for it in the current market."
Back in 2006-2007, the median price for a home in Del Norte was $285,000. Then news about the subprime mortgage crisis hit and prices started falling, Gatti said.
"It's a sad situation for sellers, but it's glorious for the buyer," she said. "The problems are not going to be resolved anytime soon. If prices would stop falling that would be great, and get sellers where they need to go."
Help for foreclosures
To prevent foreclosure, both Stremberg and Gatti said struggling homeowners should contact their mortgage lender. Since the credit crisis and subsequent federal buy-up of bad mortgages, there are now programs available to help prevent people from going into foreclosure.
"Call your bank, don't bury your head in sand and wait for the trustee sale," Gatti said.
There are options such as reappraisal, refinancing the loan or extending the term of the loan, which would lower monthly payments.
Those concerned about making their mortgage payments or foreclosure can visit the U.S. Department of Housing and Urban Development's Web site at www.hud.org or call 1-800-225-5342 for options or 1-800-569-4287 for the nearest HUD counseling agency.