Real Estate, Relocation, and Ruin: A Photo Tour of Foreclosureville, USA

Telstar Logistics visited Modesto, California recently to take in the scenery, but it wasn't a pretty sight.

A city of more than 210,000 people located about 90 miles east of San Francisco, Modesto had the nation’s third-highest home foreclosure rate during the third quarter of 2010 (just behind Las Vegas, Nevada and Cape Coral/Fort Meyers, Florida).

In practical terms, that means 1 in 36 homes in Modesto is in foreclosure, and as we discovered, the evidence of this is visible from street level. You won’t find entire blocks of Modesto that stand vacant -- it’s not Detroit, after all -- but in on practically every steet in every neighborhood, there’s usually there’s one house that’s been foreclosed.

With some practice, foreclosed homespotting becomes easy: Amid the manicured lawns and tidy suburban blandscapes, the foreclosed homes are the ones where things are slighty awry; lawns go feral, the shades in the windows sit askew, and rows of legal notices are taped to the windows near the front door.

Although at some addresses, there's nothing subtle about the situation at all:

In other parts of town, you can see the remnants of housing developments that were started but never completed, as if the land itself is waiting for the economy to recover:

“We’re going to be near the top of the foreclosure list for a long time,” Bob Johnson from Direct Appraisals in Modesto told us. “The majority of the foreclosures here are people who used home equity loans to buy cars and other things. Banks often try to help out with loan modifications, but that doesn’t really help, so people just walk away. Bottom line is, people here say they just won’t pay mortgages that are worth more than the value of the property.”

Oddly, despite Modesto’s high rate of foreclosure, new home construction continues. At a brand-new subdivision called The Arbors at Graham Estates, workers pour concrete for new foundations, just yards away from a row of newly-completed homes. Prices here start at $230,000 for a 1600 square-foot house.

According to Tim Parish, the project superintendent for developer Frontier Community Builders, the new units are selling well, even though foreclosed houses often sell for half as much. Foreclosed homes are often plagued by mold infestation, damaged walls, and broken appliances, Parish says, so “even in a market like this, some people just don’t want a used car.”

It will be a long time before Modesto fully escapes the havoc caused by the foreclosure crisis.

“We see all kinds of properties, even homes bought in 2008.” explained Omar Perez, an appraiser with Cal Valley Appraisers. “It’s going to be like this for a few more years, and that will keep a lot of downward pressure on values. Home values will eventually climb again, but I doubt we’ll get to where we were in 2005 or 2006, even 10 years from now.”

All Images: Telstar Logistics

 

Comments

[twitter.com/markasaurus]

I went to a very similar neighborhood in Manteca on my way back from Yosemite in 2008, there was no construction going on there though. We literally had a tumbleweed blow through a cul-de-sac in front of the car.

There are some photos on Flickr here: http://www.flickr.com/photos/markhogan/sets/72157610638552260/

[www.facebook.com/profile.php?id=1136552895]

this is so sad !!

[Bill]

This is amazing. I left Modesto in '93 at 19 years old. Never looked back. What a stick in the mud the place is. Thank you for solidifying my resolve never to come back. If you're still there, get out and explore another place. Believe it or not until you see another state, you won't believe what's out there. Brooklyn Dumbo, NY (Google it)

[MH for Movoto]

We need to SEE more of the recession and hear/talk a little less..... thank you for making the trip and giving your readers s a little window into what all this stuff really means.

[geoff]

Modesto is dismal. There are few jobs in Modesto, and those jobs that are there do not pay well. The city has an unemployment rate of 16%, higher than the rest of the state, and has a much larger portion of high school dropouts than the rest of the state. Modesto benefited from the boom, but doesn't have the economic base to support such high prices. Google "Modesto meth" with a news search, then look up the education and employment data for Modesto on city-data, is is not a pretty picture. Who wants to buy a house out in Methville, when you can't get a job and you will be lucky if most of your employees have completed high school?