Cleveland Foreclosures for Sale Surged, Bucked Price Trend

by Simon Lindsay on cities

Cleveland foreclosures for sale surged, driving down home prices and causing the city to miss the price recovery being experienced by fellow Ohio cities Cincinnati and Columbus.

While the average price for homes in Cincinnati and in Columbus soared in February, the sales price average in Cleveland plunged to $98,292, down by $4,304 from the January average of $102,596. Despite the improvement in home affordability, home sales did not increase and instead dropped by one unit to 644 units in February.

In Columbus, the capital city of Ohio, and in other parts of Delaware County, home prices improved, with the average price soaring by more than $16,000 to $250,414 in February from the January average of $234,062. Home sales volume, however, dropped from 115 units to 98 units, but the price average showed that the number of higher-cost houses sold in February increased.

House prices in Cincinnati and other parts of Brown County also shot up in February. The average price spiked by almost $25,000 from $75,800 in January to $100,500 in February.

Home price averages in Cleveland did not improve because of the still bleak foreclosure outlook in the city. With record numbers of breadwinners who lost their jobs in the manufacturing sector, the number of Cleveland foreclosures for sale is still surging.

Similarly, foreclosures in Ohio are still climbing up. In February, a total of 3,333 homes in Ohio were repossessed by banks and added to their sales of foreclosures. This number is in addition to the 3,214 homes listed for foreclosure sales and to the 4,739 homes that were notified of delinquency.

All in all, a total of 11,286 homes across Ohio got hit with foreclosure postings in February, equivalent to one foreclosure for every 450 residential units in the state. Ohio continued to suffer from its high unemployment rate, as shown in its upward move from 14th to 12th in the foreclosure rate chart compiled by a California research firm.

In January, 14.4 percent of all mortgage loans in Ohio were delinquent, much higher than the 13.5-percent average for U.S. states, according to figures included in the Mortgage Monitor Report released by Lender Processing Services.

According to Mike Van Buskirk, head of the Ohio Bankers League, continued foreclosures in Ohio are no longer driven by predatory lending but by the high jobless rate, which hit 10.9 percent in February. Similarly, the continued surge of Cleveland foreclosures for sale is also driven by the city’s high unemployment rate.