Foreclosures in Troup County are up while home values and home sales are down. Some local real estate professionals believe the statistics are related.

But they also say the situation here is not as bad as the rest of the nation - and it’s a good time to find an affordable home.

Nearly 2.2 million homes across the nation reached the pre-foreclosure status in 2008 compared to 1.3 million in 2007. The national average sale price of residential property sold dropped 15.3 percent within the same time frame.

Georgia Multi Listing Service Pro, a database used by real estate agencies in the state, showed 151 foreclosures in Troup County in 2008, compared to 114 in 2007, an increase of 32.5 percent.

“While there’s an increase in the number of foreclosures around here lately, it’s not nearly as bad as it is in bigger areas, such as Atlanta,” said Ben Yates, a broker with Coldwell Banker Spinks Brown Durand Realtors. “The real estate market has become a little saturated but, hey, it’s a good thing for potential home-buyers right now. Prices are down and plenty of banks are willing to lend money with good rates.”

The average sale price of residential property in Troup County was down nearly 25 percent in January compared to January 2008, according to Georgia MLS Pro. The sale price dropped from an average of nearly $140,000 to about $104,000.

Though the specific cause of the price drop is debatable, Remax Results broker Frank Nelson believes the increasing number of foreclosures is the primary reason.

“It’s definitely created an excess supply in the real state market,” Nelson said. “Business was off for us about 20 percent the past year compared to 2007. It’s not nearly as bad as large metropolitan areas such as Atlanta, of course, but we are still feeling it.”

A total of 751 Troup County properties were sold in 2008 compared to 1,067 in 2007. Residential property sales for 2008 totaled 637, compared to 884 the year before.

“No one really saw all of this coming a year or so ago,” Nelson said.”It’s just tough to be a seller right now in this market.”

A wide range of factors, not just foreclosures, are creating the current buyers’ market, said Kendall Butler, owner of F.L.I properties.

“There are just a lot of things coming together right now, mostly because of the economy,” Butler said. “One of the reasons is that it was very easy to get loans and adjustable rate mortgages in 2005 and 2006. You also had a lot more builders than usual in that time frame willing to do interest rate buy-downs, in which they pay the bank up front to drive down a buyer’s interest rates with an agreement to collect the money later.”

The increased builder- and lender-created financing led to a large number of new homeowners who had no idea about the impending economic woes, Butler said.

“Some neighborhoods have been hit harder than others,” she said. “Colby Woods, a subdivision near Old Newton Road, is one that stands out in my mind. One of the builders there had several of his properties foreclosed.”

Cari Williams, Troup County clerk of court, frequently enters deeds to foreclosures into the court’s records before also placing copies of them in the court’s deed books.

“Because of the economy, not as many people are able to buy homes right now,” Williams said. “I have also noticed more and more foreclosures lately.”

Though home sales are struggling, rental properties are experiencing an increase in business.

“Rent has been booming of late,” Spinks and Yates Management bookkeeper Pat Herring said. “It’s been a lot busier than last year because of the tough times with the economy. More people are opting to rent.”

Occasionally working directly with banks that issue foreclosures, attorney Heather Graham of Thornton and Graham Law Firm said the increase in rent and decrease in real estate sales results from a buyer’s market created by cheap foreclosure auction rates.

“Troup is obviously not suffering as badly as some of the bigger areas in foreclosures, but from what I have seen we haven’t exactly avoided it either,” Graham said.

Generally, a bank or lender will accelerate the amount of debt owed once a home owner is significantly late on payments that it has the right to, Graham said.

“Banks usually go out of their way to allow an ample amount of opportunities for homeowners to make delinquent payments,” Graham said. “Because a bank will always lose money on a foreclosure because of the low minimum auction bids. It’s sort of a last resort for them.”