Real Estate - Residential

Wilmington Region Sees Uptick In Foreclosures

By Johanna F. Still, posted Apr 27, 2022

Foreclosures in New Hanover County during the first quarter of the year were up 185% compared to last year. That’s according to records compiled by ATTOM Data Solutions, a real estate data analysis firm. 

The increase likely represents a “catch-up” on loans that were frozen or protected during the pandemic, a data expert said.

The county’s 185% year-over-year foreclosure rate increase – albeit with a much smaller sample pool – outpaced the nation (132%) and state (103%). 

Fifty-seven properties in New Hanover County had foreclosure filings as of the first quarter of 2022, up from 20 at the same time last year, according to the data. In Pender County, foreclosure filings doubled, from eight in the first quarter of last year to 16 in the first quarter of 2022.

Statewide, ​​2,265 properties began foreclosure proceedings in the first quarter, up from 1,118 at the same time last year. North Carolina ranks 21st nationwide for its foreclosure rate, or foreclosure filings per overall housing units. 

The Cleveland, Ohio MSA had the highest foreclosure rate in the country, according to the data. Wilmington’s MSA ranked 103rd out of the 223 ranked metros.

For 11 consecutive months, the nation has seen increases in foreclosure activity, according to ATTOM, catching up to normal levels before government intervention due to the pandemic. Despite the double- or triple-digit percentage increases, the spikes are relatively modest overall when considering the pre-pandemic baseline of historically low foreclosure rates. 

Even with the latest increases, foreclosure activity nationwide and statewide is still about 50% shy of pre-pandemic normal levels, according to ATTOM’s executive vice president Rick Sharga. 

“We’re seeing increased foreclosure activity across the country, and North Carolina is no exception,” Sharga wrote in an email. “A lot of counties like New Hanover with the highest month-over-month and year-over-year increase had extremely low rates over the past two years, so the percentage increases are due in large part to how low the numbers were in the previous reporting period.”

Sharga explained the influx is likely representative of mortgage servicers playing catchup on loans already 120-plus days delinquent or on foreclosure prior to the pandemic, and not an indication of weakness in current market conditions. 

“The rate of increases is largely unprecedented," he said. "I don’t recall 185% year over year increases even during the Great Recession.”

As foreclosure processing continues to move forward, spikes in activity are likely to continue, according to Sharga.

The stock of lender-mediated properties available for sale in the tri-county area peaked in early 2011 at more than 500, according to data made available by Cape Fear REALTORS.

Availability of these properties took a downward turn, and plateaued below roughly 50 beginning in about 2017. Between March 2021 and March 2022, just 11 sales of lender-mediated properties closed in the tri-county region, making up just a fraction of the overall sales volume.

Last month, there were no lender-mediated listings on the market in the tri-county area, according to Cape Fear Realtors' data.

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