America's home foreclosure crisis may have faded from the front-page headlines, but that doesn't mean the problem has gone away. Consider the situation in Modesto, California, a city of more than 210,000 people located about 90 miles east of San Francisco. According to RealtyTrac, an online service that markets foreclosed properties, 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.
See the photo gallery below for photos of the foreclosure crisis in Modesto. For the best viewing experience, choose the "Fullscreen" option in the photo gallery pop-up.
After the Housing Bubble: Scenes From Modesto
Click through the gallery for haunting photos of Modesto, California, taken by Todd Lappin in the fall of 2010, which show a city still trapped in a real estate recession. For the best viewing experience, select the "Fullscreen" option in the gallery pop-up.
Stephen Jaffe, AFP / Getty Images
In practical terms, that means one in 36 homes in Modesto is in foreclosure, and the evidence of this is visible from street level. You won't find entire blocks of Modesto that stand vacant -- it's still not Detroit, after all -- but in practically every neighborhood and on every street, there's usually at least one house that's been foreclosed. It's pretty easy to spot: Amid the neatly manicured lawns and landscapes of Modesto's streets, foreclosed homes are the ones where the lawn has gone feral, the shades in the windows sit askew, and rows of legal notices are taped to the windows near the front door.
"We're going to be near the top of the foreclosure list for a long time," says Bob Johnson of Direct Appraisals in Modesto. "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, however, despite Modesto's high rate of foreclosure, some 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, and according to Tim Parish, the project superintendent for developer Frontier Community Builders, the new units are selling well, even though foreclosures 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 very long time before Modesto will escape the havoc caused by the foreclosure crisis. "We see all kinds of properties, even homes bought in 2008." says 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."
This article was written by Todd Lappin, who also took the photos in the gallery.