Foreclosures Rise, Rental Market Picks Up

The swelling number of foreclosures in Calaveras County is devastating lives, said Steve Wilensky, District 2 supervisor. Those most knowledgeable on the subject say that foreclosures reached 400 in the past year and are continuing to climb.

"That is an incredibly high number," said Don Fry, broker and owner of Don Fry Realty in Arnold. "This is a big change. I've sold real estate for 35 years and never seen anything close to this."

"People were taking on a tremendous debt in relation to homes that they were buying thinking they would get more equity," Wilensky said. "They used their homes as the economy tightened to deal with food, medical and other expenses. People were not putting enough away."

Wilensky doesn't see home foreclosures slowing in the near future.

The first round of foreclosures has been based on loan and banking system failures. That has led to a secondary effect, job losses. In this county, already at 10.8 percent unemployment, one can see the numbers increasing daily.

"That in turn will cause people who lost their jobs to lose their homes," Wilensky said. "That is the basis for my prediction, and I'm not the only person suggesting this."

Some struggling homeowners have turned to renting to make ends meet.

"What I've seen change in the last few months is, one, people who have been trying to sell their homes in this market can't sell and they decide to rent their home on a full-time basis and, two, the people who don't wish to sell their home but are feeling the economic pinch have decided to rent their home," said Palmer McCain, broker associate with Century 21 Sierra Properties in Arnold.

Though foreclosures are happening throughout the county, the highest numbers are in the Valley Springs and Copperopolis areas, Wilensky said.

"There is a higher demand for rentals because a lot of families are losing their homes due to the mortgage crisis," said Danny Mao, Realtor and property manager for Realty World in Valley Springs.

"In certain areas in Copperopolis we have seen more foreclosures than others," said Roxanne Schilling, a Coldwell Banker Realtor in Copperopolis.

"Mostly, our foreclosures are in the Calypso Bay subdivision," she continued.

Schilling, who has been working in real estate since 1992, compares the stymied market to what she faced in the early 1990s, but noted that buyers now think differently about housing.

"It's sad to see the mentality of the people who expect something for nothing," she said.

Wilensky illustrated the hardship he is seeing in his community by telling the story of a woman who lost her home even though she was not involved in a risky loan.

"She was born and raised here and has worked here her entire life," Wilensky said. "Her husband worked in the mills but he developed a brain tumor a year ago and left work. As he lived the final five months of life, she stayed home to take care of him."

When the woman finally got back to work, she was six months behind on her mortgage payments and deep in medical debt, Wilensky said.

"That's when Countrywide told her that she had to get out of her house," he continued.

Even with community support and fundraising efforts, she had to leave Calaveras and now lives in Tuolumne with friends who took her in, Wilensky said.

While times are tough, the demand for a cabin or home tucked in the Sierra has not declined and rentals are making a surge, according to Fry.

"My phone is ringing off the hook with skiers and people looking for snow play and who want to enjoy the forest and sit by the fire in a cozy cabin," Fry said.

"The main reason people aren't buying as frequently as they did is the economy. Instead, when they need a roof over their head, they are renting cabins," Fry continued.

Not everyone agrees with Fry.

Anne Calderwood owns a home in Arnold that she had been renting out for a couple of years. She lost her tenants a few months ago because they had to downsize, she said, and she has not found it easy to replace them.

"I have been trying to rent it since Sept. 1 and have only received one call so far," Calderwood said. "When I first rented it two years ago, we had a lot of calls. I think a lot of it is the economy."

"There seems to be more supply than demand in terms of rentals," McCain said. "I have seven houses that I'm trying to rent on a full-time basis for the owners."

"There is more permanent renting going on from last year to this year," Fry said. "People are less likely to buy big-ticket items. As you can see, car dealers are folding up left and right."

Fry said that he uses Sacramento and Las Vegas as barometers to judge how well the housing market is doing. Those two markets have historically been very stable and healthy, Fry said, but now he is seeing them both take huge hits in the economic downturn.

Among the tattered remains of what was once a strong housing market, some glimmers of hope remain.

"This market has opened up a market for first-time homebuyers who were priced out of the market and could not buy," Schilling said. "We need to get back to reality and scale down and try to make the best of the market the way it is right now."