I-Team: Will ending foreclose ban impact everyone’s home prices?

In the midst of a booming seller’s real estate market, an I-Team investigation is revealing multiple agencies are preparing for what the end of foreclosure and eviction bans will mean for the entire Miami Valley’s housing market.

The Consumer Financial Protection Bureau reported nationwide, the number of homeowners behind on their mortgages has doubled. More people are missing payments than at any other time since the peak of the Great Recession in 2010.

This comes at a time when industry experts say there are few Miami Valley houses up for grabs and sellers have all the power.

“We had I think seven or eight showings on the first day it was listed,” Julie Arias said.

The next day, she and her husband accepted an offer $10,000 more than the asking price for their Dayton home.

“We were very lucky and blessed to have the opportunity to sell the way we did,” Arias said.

Lifelong Miami Valley resident Jon Murray, who has been a realtor since 2005 and now is his real estate group’s team leader, said Arias’ story has become a pandemic norm.

“You’re sheltering in place at home, so sheltering in place has become more important, so COVID actually caused the market to boom,” Murray said.

That boom comes at a time when there are very few houses for sale. A few years ago, Murray said there were typically about 2,000 Montgomery County homes on the market at any time. Now, he estimates that number to be between 700 and 800.

“Today we have very, very low inventory,” Barry James the president and CEO of James Investment Research Inc. said.

James has more than 35 years of experience managing money and researching financial trends. He said during the pandemic, people have been saving more as their home values and stock market investments have increased.

James says that means potential buyers now have more money to spend.

“Their income has risen and interest rates are low, so that makes them very much more amenable to buying a home,” James said.

However, as some in the Miami Valley are trying to buy a home, others are still struggling to feed their families.

The Dayton Foodbank’s chief development officer, Lee Lauren Truesdale, said with foreclosure and eviction bans set to end soon, she feels an urgency to prepare to feed hundreds more people.

“We know there’s a number of families in our community and nationwide who haven’t paid rent throughout this pandemic. That’s well over a year, maybe [some who] haven’t paid their mortgage in that time as well, so that’s going to be a really substantial bill coming down the pipeline,” Truesdale said.

Meanwhile, the latest US Census Bureau data the I-Team reviewed already shows more than eight million surveyed late last month are struggling to pay their mortgages. This includes mostly married, 40-54-year-old couples with two kids making $35,000 to $50,000 per year. These people said despite using stimulus money to help pay all their bills, they still cannot make their mortgages.

United Way of the Greater Dayton Area President and CEO Tom Maultsby also worries about extra help, like rent and mortgage grants ending. He says more of the very poor living in, or just above the poverty line are already asking for housing payment help.

“We’re pretty confident that we’re going to be ok for a while,” Maultsby said. “But what happens when all of this is over?”

With that question lingering, some real estate professionals like Murray are wondering if the current market situation will create a housing bubble.

“I’m afraid of that too,” Murray said. “It’s not sustainable.”

The country saw a housing bubble during the mid-to-late 2000s, built on banks approving too many people’s mortgages who could not afford them. The bubble burst caused the housing market crash, and the Great Recession.

“It’s not a bubble. Not yet, not anywhere close to being a bubble,” James said. “So compared to where it was in ’05 and ’06, we’re not anywhere near that.”

He explained, that’s because there have been major law changes. Meanwhile, no one knows when banks will be allowed to foreclose.

For perspective, the I-Team examined property data company ATTOM Data Solutions’ latest numbers. It shows, Ohio has been ranked in the country’s top 10 foreclosure states for more than five years.

“They’re just waiting to foreclose on those properties right now, and that will actually help buyers when they lift that to give us more inventory to purchase,” Murray said.

Murray said when that happens, foreclosed homes will actually help ‘for sale’ numbers look closer to normal.

For now, so few homes on the market means the best of times for sellers.

“I think there was just a lot of emotion in the market, and there probably is, because of the pandemic,” Arias said.

Matthew Simon

Matthew Simon

I'm proud to lead the I-Team, News Center 7's investigative and special reports unit. During my 20 yrs in the business, I've always admired WHIO-TV as the best in the business. I couldn't resist the opportunity when WHIO-TV recruited me to join their team as Special Projects Executive Producer. Watch my in-depth I-team reports on News Center 7.