This week, the Star Tribune published a 3 part series highlighting Wright County’s housing dilemma and the factors which lead to it. On the news or in the newspaper, you tend to hear blurbs of information here and there, some of it local, some of it national, none of it comprehensive. This three part series tells many aspects of how the local Twin Cities real estate
market has turned the way it has and how the foreclosure rate doesn’t just affect the families losing their homes. It also wasn’t solely the fault of the homeowners that they’re in the situations they’re in, either. Though it highlights Wright County specifically, the same types of events explain housing troubles in every county in the Twin Cities metro area. Wright County was hit particularly hard, however, due to its rural nature before the housing boom.
In Wright County, reckless speculation and the mortgage meltdown have turned subdivisions into virtual ghost towns.
…the combination of affordable land, cheap money and boundless optimism lured builders and families chasing big homes in the kind of brand-new subdivisions they thought were beyond their reach…
But the boom has unraveled as quickly as it began. While many established Wright County neighborhoods have avoided the worst of the housing market collapse, the county ranks as one of the state's worst areas hit by foreclosures. Pockets of this county, about 30 miles northwest of the Twin Cities, have seen home prices fall 30 percent or more in the past year.
Part 1: Minnesota’s New Ghost Towns
Wright County was a haven for speculators -- until they got burned in the downturn.
In the rush to find blame for the nation's current housing crisis, the easiest targets have been the lenders and mortgage brokers who peddled predatory loans.
But across the country, from the desert suburbs of Las Vegas to the treeless subdivisions of Wright County, many homeowners face a predicament of their own making…
…Now, with home prices falling and mortgage payments rising, panic has set in. Investors are dumping houses on the market before prices collapse further, or simply turning the keys back to the lender. That, in turn, is dragging down values for even longtime homeowners, wiping out the equity they'd built up over the years.
In Wright County, the number of unsold houses on the market has swelled to more than twice the national average. Officials estimate that up to half of all houses that have gone into foreclosure during the past year are owned by investors.
Part 2: Housing Bets Gone Bad
Wright County welcomed growth with new schools and wide roads. But as half-built subdivisions lie fallow, it's paying the price. Officials are scrambling to revitalize neighborhoods that have fallen into decline just years after they were built.
…Housing values are declining at a time when many local governments are in the midst of building new schools and roads and expanding waste-water treatment plants. And vacant homes and half-built subdivisions do little to attract employers or shops that might help turn things around.
Foreclosed homes affect more than the owners of those properties and their lenders. In Minnesota, where one in 40 houses is projected to go into foreclosure in the next two years, homes within an eighth of a mile of a foreclosed property are set to lose an average $4,129 in value…
Losses attributable to foreclosures and property-value declines will trim $2.3 billion from Minnesota's state and local tax base. But the total cost of foreclosed and vacant homes is much higher…
Part 3: Suburbs Stuck with Empty Houses are Trying to Figure Out What to do Now
Real estate is highly localized. Though similar scenarios have played out in counties across the U.S., it is important to know specifically about what is going on in our neck of the woods.