Roanoke Foreclosures Shot Up 353 Percent Due to Job Loss
The rate of Roanoke foreclosures shot up by an overwhelming 353 percent in 2009 from 2008. Job losses that pushed up the unemployment rate from 4.4 percent to 7.1 percent in 2009 largely caused the rise in foreclosures.
The pace of Roanoke foreclosures shot up by a staggering 353 percent in 2009 over a one-year period, surpassing the rates of increase in metro areas that have been dominating foreclosure charts since the start of the downturn, such as Las Vegas and other cities in the Sand States.
Compared to the pace of foreclosure in 2007, the rate of increase was even much higher at 1,537 percent.
According to Susan Lower, director of property valuation for Roanoke City, the rise in foreclosures in the city was not caused by the use of toxic mortgages or the overinflation of home prices during the boom. Lower said that house prices never increased by over eight percent over a single year.
Lower explained that job losses largely caused the rise in foreclosures, despite the lack of mass layoffs in the area. The accumulation of job cuts at several companies pushed the unemployment rate from 4.4 percent in 2008 to 7.1 percent in 2009.
Based on employment data from city records, among the companies that laid off a number of workers were Freight Car America, which cut 120 jobs; Salem Preferred Partners, which cut 104 jobs; and Sportsman Warehouse, which laid off 54 workers. Another big retailer, Valley View Mall, also cut jobs as consumer spending declined sharply.
At the start of the housing meltdown, the number of Roanoke foreclosures was not significant, as jobs continued to be secure. The biggest employers in the area – the regional medical center and the universities that include Virginia Military Institute and Virginia Tech – were able to maintain their high job levels.
But as the nationwide recession persisted, several companies in Roanoke began to cut jobs and foreclosure filings started to rise. In Southwest Virginia, auto parts manufacturers, which had around 11,000 workers as of January 2009, began laying off workers.
In November last year, foreclosure filings in Roanoke soared by 520 percent compared to November 2008. The increase in foreclosed properties for sale drove the price down from the November average price of $196,286 to $185,008 in November 2009 and pushed a lot of first time buyers to make price offers of between $110,000 and $150,000.
For the entire year of 2009, the rate of Virginia foreclosures stepped up to 1.6 percent, a jump of 6.4 percent from 2008 and an overwhelming increase of 219.7 percent from 2007.
With a significant push by the three-digit increase in Roanoke foreclosures, Virginia posted the 16th highest rate of foreclosure among all states in 2009.
By Cassiano Travareli