Foreclosures: Tacoma up, Seattle down

Home foreclosures rose 7 percent in Tacoma this summer, while falling 7 percent in the Seattle-Bellevue-Everett area, a national foreclosure report released late last week shows.

One in every 329 Tacoma homeowners was in serious danger of losing a home, a fate that was shared by one in every 542 homeowners in the Seattle-Bellevue-Everett area.

The report comes at a time when real-estate analysts nationally are anxiously watching for signs that falling home sales and the resetting of interest rates on adjustable-rate mortgages may drive more homeowners into default.

So far, the Seattle area has escaped that, according to the report by RealtyTrac, a California-based provider of foreclosure data.

The Seattle area's foreclosure rate was significantly better than the national norm — one foreclosure for every 363 U.S. households — during the third quarter of this year.

That doesn't surprise Rich Bennion, executive vice president and residential-lending director for Seattle-based HomeStreet Bank.

Although local home sales are down, prices remain strong, and "when prices are strong, you don't have foreclosures," Bennion said.

"If someone gets into trouble, they're able to sell their house for enough to pay the mortgage off so they don't have to go into foreclosure," he said.

Greater Detroit, the national leader among large metropolitan areas, reported one foreclosure for every 80 homeowners. Fort Lauderdale, Fla., the Denver area, Miami and Dallas rounded out the top five.

Those areas have experienced either job loss or overbuilding, Bennion noted, while Seattle has not.

"We have a combination of things that create a housing shortage," he said. "We have positive job growth, personal-income growth and increasing population. Coupled with that, we have real barriers to growth — not much flat, dry ground to build on and growth management, which constricts supply."

All that puts housing at a premium, which dampens the foreclosure rate. Greater Seattle ranks 67th among the 100 largest metropolitan areas, RealtyTrac's report says.

Seattle-area foreclosures dropped 7.34 percent from the second quarter to the third; 1,805 homes entered some stage of foreclosure in July, August or September.

Tacoma's rate of 329 homeowners in default is closer to the national average and placed it 42nd on the list of the top 100 metro areas. The 843 Tacoma homes in foreclosure in the third quarter represented a 7.25 percent increase from the second quarter.

The majority of metro areas also reported increasing defaults, said James Saccacio, chief executive of RealtyTrac.

"It appears that a combination of factors, including a slowdown in home sales and lower home-appreciation rates, are contributing to higher numbers of delinquencies," Saccacio said in a statement.

"It's also likely that part of the reason for the increased foreclosure rates is the long-anticipated effect of the first wave of adjustable-rate mortgages resetting at higher monthly payments, putting homeowners into financial distress," he said.

Bennion expects local foreclosures to increase, too.

"We at HomeStreet expect them to go up but still we don't expect anything drastic," he said.

Elizabeth Rhodes: erhodes@seattletimes.com