The Great Recession may be over but a high number of foreclosures and home vacancies are still part of the Princeton landscape.
That’s the case in talking with the Princeton Public Utilities Commission, Princeton Realty and property broker Kitty Kruse.
One way of tracking the number of vacant homes in the city of Princeton is through checking the number of them registered at city hall. The City Council adopted an ordinance on July 23, 2009, that requires owners of vacant buildings in the city to register each of those properties with the city no later than 30 days after the home becomes vacant.
Since the ordinance was passed, 14 vacant structures were registered in 2010, 17 in 2011, and one for this year as of about two weeks ago.
Lynn Paulson, building inspector for Princeton, has seen examples of vacant homes being damaged through neglect. He told of a vacant home about two years ago in the city’s Meadow View housing addition in which approximately 250 gallons of water was flowing inside the home’s interior. The structure had to be gutted to make it livable again.
Another result of the six-year-old housing market crash and its subsequent tidal wave of foreclosures, Paulson said, has been the steep drop in home values. He told about a home in Otsego, south of Elk River, that someone had purchased for $180,000 to $190,000 before the housing collapse and the same house later selling for $49,000.
There are people who are “stuck” in their homes because of the difficulty of getting a decent price, Paulson added.
Another way of getting at the number of foreclosures in Princeton is to simply count the foreclosure legal notices, which the Princeton PUC has been doing since three years ago. PUC manager Dave Thompson said last week that about 68 housing properties are still in foreclosure since the PUC began counting them in 2009.
Effect on realtors
The nation’s record number of foreclosures in recent years has obviously affected business for realtors. Besides the dropping home values, another effect has been that foreclosed properties have dominated home sales in the last three years, at least for Princeton Realty. That’s what Wendi Wicktor, owner of Princeton Realty and Milaca Realty, said last week.
“August 2006 is when things really changed, when I saw the biggest change,” Wicktor said about the housing market. Her real estate business was very good prior to that and then it “hit the brick wall” in 2006, she explained. It did pick up again for a period of time after that to produce a “fair amount of home sales in 2007, but it never regained what it was prior to August 2006,” Wicktor said.
She also found during years 2008-10 that she was no longer getting the high-end property sales like she once had but was instead mainly dealing with homes valued at $100,000 or less.
Kruse, who works as a broker for Wicktor, noted that the foreclosure process has also slowed up because of government programs offering options for longer redemption periods, the time when the foreclosed homeowner can stay in the home. The old standard redemption period was six months beyond the date of the sheriff’s sale and now that is often lengthened by another six months or more, Kruse said. The redemption period is when a foreclosed homeowner can pay the back amounts owed on the property to regain the title.
Kruse is not predicting a lot of good news for home values going up, at least in the near future. “I do foresee values will go down because there are so many vacant homes and the economy is bad,” Kruse explained. The original timeline that had been forecast for the housing-industry turnaround to begin was 2010, Kruse added. But now, Kruse said, it likely won’t be until 2014 before things “level off with the potential to get better.”
What would help the Princeton area, Kruse said, is more employment.
Kruse, meanwhile, has work to do in her second occupation as a REO (real estate owned) specialist. The job entails working for banks to keep track of when a foreclosed home is vacated and then make sure the home is maintained. A problem with lengthened foreclosure redemption periods, Kruse said, is that these homes go without upkeep for a longer period of time.
And sometimes, Kruse added, people will strip the homes as they leave, even taking the carpet, the cupboards and the furnace along with them.