By Nancy Huddleston, Editor

You know the house in your neighborhood – the one where the landscaping is starting to look overgrown, the lawn is browning and sprouting weeds under the hot summer sun and there may or may not be a for sale sign in the front yard.

It could be one of a growing number of foreclosed homes on the market that are just sitting there.

In 2007, there were 96 such homes in Savage, compared with 48 in 2006 and 24 in 2005. Statistics from this year aren’t available because homes are not put on the list until they are vacant, but Building Official Jay Scherer says the number is growing.

Scott County keeps foreclosure information and passes it onto city officials, who in turn add new properties to its list. Scherer said once the city is notified of new foreclosures, his department sends someone to walk around to check and make sure all the doors and windows are secured and to make an overall assessment of the property. Then every two weeks inspectors drive by the foreclosed homes and every six weeks they do another walk-around inspection.

“The goal is to make sure these homes do not turn into crack houses and that vagrants are not living there,” he said.

As well, city officials are making sure yards are maintained and look for other problems, such as broken water lines and if the home is falling into disrepair.

“We don’t want these homes to turn into a blight on the neighborhood, so that’s why we have procedures in place to deal with these homes,” he said.

But, Scherer noted, foreclosed homes are not going to look like they did when someone was living there because oftentimes the utilities are shut off to protect against damage. So, for instance, in the summertime, the grass will only get watered when it rains because the water is shut off.

“Some homes are proactively handled by the mortgage companies as they will have someone come out to maintain the homes,” he said, “Also, if a foreclosed home is in a townhome development, those will often look the best from the outside because the association takes care of things.”

Scherer said the foreclosures are city wide – from downtown to Dufferin Park to Woodhill. “They are all over the place and no one area in particular is being impacted over another,” he said.

He advises residents who have concerns about a foreclosed home in their neighborhood to call the city at (952) 882-2660.

Not alone

Savage is not alone in the growing problem of foreclosed homes, as the Savage City Council learned this week from Cindy Geis, who manages property tax records and the revenue department for Scott County.

County records show that for 2007, there were a total of 644 foreclosed homes, compared with 313 in 2006 and 142 in 2005. In each of those three years, Shakopee led the way in foreclosures, with 177 in 2007, 96 in 2006 and 36 in 2005. Prior Lake had 176 in 2007, 61 in 2006 and 34 in 2005. And Jordan had 38 in 2007, 28 in 2006 and nine in 2005.

As well, smaller cities in the township areas are being impacted by foreclosures, as the 2007 statistics show Elko New Market had 41, Belle Plaine had 34, New Prague had 23 and Credit River Township had 18.

Geis said foreclosed properties are impacting home values county wide, but because the assessment process runs two years behind, residents might not feel like they are being assessed properly.

“The sales period of October 2006 to September 2007 is the timeframe by which the sales the county has received are used to determine taxes calculated for 2009,” she explained during a presentation to the City Council on Aug. 4 about assessor services that the city contracts for with Scott County.

So, if someone has a home assessed at $275,000 and they can only sell it for $250,000, they often come to the county to get their assessment reduced.

“The county has to ask itself, could this house have sold as is today in the amount we have it assessed for,” she said. “Next year we expect that outcry where someone comes to us and says, ‘I just bought and I paid X-Y-Z and I’d like my valuation reduced.’

“But we have to go back to 2006-07 timeframe. If they go to court the judge will use that, too,” she continued, “So it’s a difficult timeframe because economic conditions are on a downward trend. I expect it will take a good year or so for the market to recuperate and to see an upward swing.”

In short, Geis said, foreclosures are going to impact property values.

“This is something new – we haven’t been in a declining market for many, many years,” she said. “Plus, the county has been pretty affluent and growing. In the past, it was such a small portion of overall sales that they were thrown out of the sales study,” she said. “But because of the number of foreclosures, those have to be factored in now.”

 Nancy Huddleston can be reached at editor@savagepacer.com.  

Do you have a foreclosed home in your neighborhood? Do you feel it is impacting your home value? Sign up as a registered user and voice your comments at the end of this story.