More lenders are increasingly unloading foreclosed homes as the inventory stocks up in Sonoma County. The good news is only for buyers, while for homeowners trying to sell, this means disaster.

In February, one out of every homes sold in Sonoma County was a home that foreclosed within the past 14 months. That month, buyers purchased 16 houses or condos that had recently been in foreclosure every week.

Some buyers are looking for a place to occupy, while others are looking for an investment as the prices today are at their lowest level in five years.

James Madison, a Coldwell Banker agent specializing in foreclosure sales, said there are still many foreclosed properties out there, with more going back to the bank. Still, there are many buyers waiting in line for it because prices are at the point where people are willing to make offers.

Lenders are starting to become more open to the notion of significantly cutting prices rather than holding onto homes that are dragging on the sales block.

Still, the rest of the housing sector has a long way to go before hitting bottom, agents said. To that, bank-owned homes will have to go first but the way things are so far this year, there will be more and more homes ending up in the inventory.

Every week, lenders seize almost 50 Sonoma County homes and condos from borrowers who have stopped paying their mortgages, according to the county recorder’s office. In Manteca, those who lost their homes to foreclosure are turning to the rental market for solutions this year, sending rental prices high and making it hard to find temporary housing.

Local landlords said they have been receiving more calls from potential renters. As a result, their buildings are never empty.

Foreclosures continued to rise over the last two years, but the surge in rental demand only started this February, said local realtor Linda Aksland, who manages about 30 rental homes in Manteca.

John Morrison, who manages 72-unit Olive Park Apartments, said that in 12 days, he had 12 people moving in one after the other, and it started right after January ended.

The recent growth in demand also prompted many realtors and property managers to demand higher lease payments and better credit from renters. Aksland believed that average rents increased by about $100 this year.

Others said that the increase in rents today are making up for a slow 2007, when almost everyone seemed to be buying a home. Connie Kesler, who runs the 45-unit Captain’s Cove apartment complex on Union Road, said she lowered her rates to $685 a month last year. However, she brought them back up to $725 this year.

Many property managers also said that former homeowners are going back to rentals. Aksland estimated that foreclosure victims only accounted for 10%t of her renters. She said that these people were probably hesitant to return to the distressed housing market.

Meanwhile, foreclosures on investor-owned properties, which are often rented out, have forced more people to look for new places. Consequently, it has also lowered the supply of temporary housing.

However, some of these foreclosed houses may return to the rental market soon as investors come back to take advantage of rental demand.