Foreclosures Spiking In Minnetonka

In the last few years foreclosures have been on a low key in Minnetonka but since this year the picture has changed with a rush in numbers. It shows that Minnetonka in Minnesota is not immune to the foreclosure crisis. This year there has been 231 foreclosures. Since 2006 foreclosures have been creeping in – albeit slowly.

Julie Wischnack is the director of Community Development. She said that never before has there been so many foreclosures in Minnetonka. She does not know how things could become worse than this. In 2007 there were 80 foreclosures as against 231 of this year. No part of the city has been spared the curse. Wischnack said, “It’s ironic. It’s not focused on a neighborhood or sector of the city, it’s across the board.”

The value of a major chunk of the reo homes ranges from $200,000 to $300,000. All the houses ranging from $1.5 million to less than $200,000 are reo houses.

According to the October report of Minneapolis Area Association of Realtors 34% of all the houses in the real estate market were under the stamp of foreclosure of some kind or the other. In 2006 and 2007 the proportion was 3% and 7% respectively.

The increase in foreclosure numbers is accompanied by a fear that those properties not yet in the soup might soon follow suit. Calls to assistance groups in the city are pouring in with residents afraid about whether they can continue to hang on to their houses or not. The city lacks the direct power and funds to help the assistance seekers. Hence they are directed to other agencies like ICA, CAPSH etc. Wischnack retains contact with these and gets detailed reports about how many are asking and getting help. She said, “It was staggering what they were telling us in terms of requests for assistance.”

The planning department of Minnetonka has also been seeing changes in various development and re-development construction plans that have been submitted. Wischnack commented, “The amount and size of the projects is not what it used to be.” Nevertheless Wischnack is sanguine that things will start picking up from 2009 – at least it will be an improvement on 2008. She added, “We are still getting a fair number of applicants for development. We feel like we are okay. I think Minnetonka has enough diversity to withstand this economy. I would like to stay hopeful.”