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June 26, 2013

Wichita area foreclosure rate continues to drop

Foreclosure rates in Wichita continued to fall in April, reaching the lowest level in nearly four years, according to newly released data from CoreLogic.

Foreclosure rates in Wichita continued to fall in April, reaching the lowest level in nearly four years, according to newly released data from CoreLogic.

CoreLogic, a national company that compiles real estate-related data, showed that in April 1.31 percent of all outstanding mortgages in the Wichita area were in foreclosure, while 3.81 percent were 90 days or more delinquent.

Both rates have been showing a clear downward trend for the last six months and are at their lowest levels since late summer of 2009, when both rates were rising fast. In April 2012, the foreclosure rate was 1.71 percent and the delinquency rate was 4.31 percent.

While Wichita area never experienced the widespread foreclosure crisis that faster-growing areas did, it did see a doubling in its foreclosure rate between 2008 and 2011 as the economy hit a recession.

Stan Longhofer, director of the center for real estate at Wichita State University, said that it’s clear that the foreclosure crisis in the area is receding. The local economy is growing, although slowly, and many of the most vulnerable people have already lost their homes.

The implications for a declining foreclosure rate are all positive, he said. It encourages higher home prices, which encourages home sales and re-investment, he said.

“It creates less headwind for appreciation,” he said. “And from the standpoint of lenders, when foreclosure rates are declining it allows them to ease up on lending standards. But the bigger issue is the social toll: foreclosure is enormously stressful, a terrible situation for everyone involved.”

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