By John Cutts
The Alabama city of Birmingham experienced a drastic increase in the number of distressed properties in the third quarter. According to recent market data, Birmingham's foreclosure rate surpassed those of other Southeastern cities.
From July to September, about 2,622 households received one foreclosure filing or one out of 190 houses. The figures represented a drop of 1.35 percent compared with the second quarter and a 336 percent increase from the same period a year ago.
Birmingham's foreclosure rate earned the city the 83rd spot in the list of 203 metropolitan areas in the country with high number of distressed properties. Birmingham's ranking was the highest in all of Alabama and some cities in the Southeast region, including Chattanooga, Columbia, Nashville, Louisville, Raleigh, Knoxville and New Orleans.
On a positive note, Birmingham's foreclosure rate trailed behind Charlotte, Atlanta, Jacksonville and Memphis. Industry experts said that Birmingham's repossession rate was high but manageable, considering the impact of the increasing unemployment rate and the sluggish economy.
They pointed out that an area's high foreclosure rate is greatly influenced by its unemployment rate. They cited the city of Huntsville which is experiencing labor market stability because of the U.S. Base Realignment and Closure which brought in a great number of contractor and military jobs into the city.
The unemployment rate in Huntsville was 7.9 percent last month while its foreclosure rate gave it a ranking of 155 nationwide. The Huntsville ranking was way below Birmingham's 83rd rank which posted an unemployment rate of 10.2 percent last month.
In other cities in the Southeast region, the foreclosure rate in Charlotte rose to a level that earned the city the 71 spot in the list of cities with high foreclosures. Similarly, Atlanta has been experiencing a rise in its foreclosure rate which earned it the 38 spot. The increase was attributed to its unemployment rate of 10.5 percent and overbuilding problem.
A look at Southeastern cities with low foreclosure rates showed that Nashville ranked 119 in terms of foreclosure rate, a feat attributed to its diversified economy and the city being the seat of Tennessee government.
In Alabama, Tuscaloosa had the lowest number of distressed properties amongst all cities in the state. The city was ranked 190 in the list while Mobile was on the 99th spot and Montgomery on the 44th.
