Foreclosures signal more trouble ahead
A Web site that tracks foreclosures across the United States lists 31 bank-owned homes currently for sale in the Columbia Falls area, an indication of the shaky economy here. In addition to the bank-owned homes, there are 10 properties listed for sale by trustee auction.
A little less than a year ago, the site, RealtyTrac.com, listed 14 properties for sale by trustee auction and another 16 owned by banks in the 59912 ZIP code, which includes the city of Columbia Falls and surrounding area.
In a wider search of the site, the number of bank-owned properties in Flathead County balloons to 215. Another 82 homes are listed for sale through trustee auction.
Those numbers appear to be the tip of the iceberg. In 2009, Flathead County had 684 notices of foreclosure and 1,027 trustee auction notices, according to the clerk and recorder's office. Of those auctions, 413 were canceled for various reasons.
The real estate woes run across a broad spectrum of economic classes, from an $89,000 home in Kalispell to a $3 million-plus home on Farm-to-Market Road.
In the Columbia Falls area, there's a listing for a $1.87 million bank-owned home.
Bill Dakin, owner of Remax/Mountain View in Columbia Falls, predicts things will get worse before they get better.
"Foreclosures have an affect (on the whole) market. Lenders price them aggressively to get them off their books," he said last week. The net result is they further depress the housing market.
Dakin's real estate office sells "distressed" homes and also helps sellers in trouble through the process of a foreclosure.
There are two main reasons for the raft of foreclosures, he noted. For one, some people simply have too much debt and can't afford the home they're in. They can't sell the home for what they paid, particularly if they bought it during the height of the boom — from 2005 to 2007.
"The homeowner is what's called 'underwater,'" Dakin explained.
Others have simply lost their jobs and can't afford to pay. Montana has a homestead exemption law — designed to keep owners from losing their homes in a financial crisis. But that only protects the equity in a house, not the debt on it.
The real estate depression isn't limited to homes. There's also a glut of vacant lots, and Dakin expects prices to continue to drop on those.
The good news is there are bargains out there and a working family, who couldn't afford to buy a home in the boom can afford to buy one now.
For example, a bank-owned condo in Columbia Falls is listed at about $75,000 on the RealtyTrac Web site.
But buyers need to be aware that foreclosed homes aren't always bargains. There can be back taxes and additional liens on a property, which drive up the cost.
The Realty Trac Web site lists the homes, but does not list other pertinent information, such as the exact address and who owns the lien. For a fee, an individual can purchase that information. If the foreclosure is a trustee sale, the information is available for free in person from the county clerk's office.