Home Foreclosures Tick Up Slightly in Connecticut
Home foreclosure activity reached a 10-year low across the nation in 2016, but Connecticut didn't have much cause for celebration, a new report Thursday shows.
Connecticut was among 12 states and the District of Columbia that saw residential properties with foreclosure filings rise compared with the previous year, according to the report from ATTOM Data Solutions, the parent company of RealtyTrac.
In 2016, Connecticut had 13,621 residential properties with foreclosure filings, up 21 percent, compared with 2015. Properties can have one, two or three filings that are monitored by ATTOM: starts, auction notices and bank repossessions; and not all properties will necessarily be repossessed by lenders.
Nationally, the number of properties with filings fell nearly 14 percent, compared with 2015. Elsewhere in New England, Rhode Island rose 29 percent and Massachusetts was up 21 percent.
"I don't think it anything to get concerned about right now," Donald L. Klepper-Smith, an economist at DataCore Partners Inc. in New Haven, said, of the Connecticut numbers. "But I do think its a direct function of a labor market that's underperforming in Connecticut."
Connecticut still has not recovered all the jobs lost in the last recession and employment growth has been stagnant. The latest jobs report for the state, released in November, noted Connecticut added just 1,400 jobs in the previous 12 months.
"We're still in a base building mode," Klepper-Smith said. "There's nothing to suggest we are headed to a recession any time soon, but these numbers show there can be pockets of weakness."
Klepper-Smith said Connecticut's recovery has lacked any significant income growth and there isn't strong consumer spending power.
Thursday's report shows the number of properties in the foreclosure process is down 37 percent from the peak of the foreclosure crisis in 2010.
And the number of properties in foreclosure represents .91 percent of all Connecticut residential properties, up from .76 percent in 2015. The percentage for 2016 still falls within the one percent or less that is to be expected in an expanding economy, but is at the high end.
Across the nation, the percentage stood at .70 percent.
Daren Blomquist, senior vice president at Attom, said the volume of new properties entering the first stage of foreclosure in Connecticut — foreclosure starts — was cause for some concern, rising 35 percent, to 9,518, compared with 2015. The nation saw a decline of 16 percent.
The number of starts in Connecticut is 46 percent lower than the peak in 2009, but provides a fresh snapshot of homes just now entering foreclosure.
"If this trend was to continues, then we would start to be concerned with it becoming a drag on the rest of the market," Blomquist said.
Foreclosures can pull down the value of properties that are located nearby or of comparable size. Sales of single-family houses were strong in 2016 and prices started to creep up modestly in some towns.