Layoffs Increase Foreclosed Houses in Minnesota Counties

As layoffs continue in the Minnesota city of St. Cloud, the number of foreclosed houses continue to rise.

St. Cloud is the most populous city in Minnesota’s central region and is the county seat of Stearns County. It also extends into Benton County and is the third largest city, second only to the Twin Cities of Minneapolis and Saint Paul.

According to recent data, the rise in number of foreclosed houses in St. Cloud continues as the recession keeps both big and small businesses struggling.

The number of foreclosed houses in Stearn County and Benton County averaged 47 units per month from January through May this year.

Compared to the same period last year, which had a monthly average of 52 units, the pace of foreclosure slowed down, but when compared to the average of 45 per month in the same period in 2007, the pace of foreclosures increased.

Louis Johnston, associate economics professor at St. John’s University and College of St. Benedict, said the figures seem to be manageable, but he said the previously held thought of long-term recovery seems unchanged.

Compared to May last year, the pace of foreclosures in May this year increased by 14 percent. In May last year, there were 51 foreclosures filings in the counties of Stearns and Benton. Filings increased to 58 units in May this year.

Compared to the previous month of April, when there were 41 foreclosure filings, the May figure also represented an increase.
In St. Cloud, the number of foreclosed houses has been rising since the housing market collapsed in 2007.

Local analysts said that local businesses are still struggling and still laying off employees despite some improvements in the U.S. economy and some portions of the local economy.

Johnston explained that the biggest reason for the continued rise in foreclosures is the recession, which is pushing up unemployment rates.

In the Stearn-Benton area, the jobless rate is still at a high level of 8.1 percent, despite its drop from the 9.8 percent record level of joblessness in February and in March.

Johnston further explained that area economy needs to recover before the pace of foreclosure slows down.

To respond to the continued rise in foreclosures, the state of Minnesota and the city of St. Cloud have partnered with the Central Minnesota Habitat for Humanity for the purchase and rehabilitation of foreclosed houses.

Cities and counties have also jointly asked for federal money to help them buy foreclosed houses, repair them and then sell them to deserving lower-income families.

By Cassiano Travareli