This bank-owned home in Mashpee is for sale for $224,900.
Second-home owners and investors are not escaping the wave of foreclosures that has crashed on Cape Cod.
Foreclosure activity has mushroomed in Barnstable County, and nearly a third of the properties at risk of foreclosure are owned by people who don’t live in them year round.
Of the 557 foreclosure petitions filed for single-family homes and condos during the first half of the year, 177 are owned by people who indicated a different mailing address, according to The Warren Group, parent company of Banker & Tradesman. The data suggest the homes are not used as primary residences and instead belong to vacation homeowners or investors.
But local Realtors and foreclosure prevention counselors say over-leveraged second-home owners are not driving the jump in foreclo-sures on Cape Cod.
“I’m not seeing that. Homeowners that are losing their houses Â… have some type of exotic financing and have refinanced their houses several times. They’re just buried in debt,” said Jack Creaven, an agent with RE/MAX Classic in Marstons Mills.
The vast majority of the foreclosures are of lower-priced homes that were bought by first-time homebuyers or homeowners who were trading up, according to Marie Souza, an agent with Realty Executives in Centerville. Most of those buyers got into trouble by obtaining or refinancing into risky adjustable-rate mortgages, or tapping the equity in their homes.
“My experience of the second-home owners has been that this really and truly is discretionary income, and a lot of people pay cash or they’re financially secure and they’re still using these houses to primarily vacation in,” Souza said.
About two-thirds of the homes sold on Cape Cod are to second-home owners, according to Jamie Regan, a Mashpee broker who is president of the Cape Cod & Islands Association of Realtors.
David Holt, an agent with Today Real Estate who is marketing 45 bank-owned homes on Cape Cod and in Plymouth, estimates about 20 percent of the foreclosed properties he lists are investor-owned.
Most of the investors who lost their properties refinanced or cashed out their home equity, while the rental income they relied on to help them with mortgage payments wasn’t sufficient, explained Holt.
Cheap Cape
Of the 38 bank-owned or pre-foreclosure homes listed for sale on the Today Real Estate Web site, 29 are priced between $93,000 and $249,900 – well below the region’s median price. The median price for single-family homes sold through May of this year in Barnstable County was $345,000, according to The Warren Group.
Foreclosures have nearly tripled in Barnstable County compared to a year ago. There were 261 foreclosures from January through May, compared to 95 during the same months in 2007, according to The Warren Group. Most of the foreclosures have been concen-trated in Falmouth, Hyannis, Yarmouth and Mashpee.
Foreclosure prevention counselors on Cape Cod are concerned about renters living in investor-owned properties that might be dis-placed because of a foreclosure. But Pamela Parker, who works at Housing Assistance Corp. in Hyannis, said her agency has not seen a spike in foreclosures of investor-owned or vacation properties.
“Right now, we are not seeing a tidal wave of people who are losing their homes because of foreclosure on the landlord,” said Parker.
