OfflineI found an interesting article that discussed the foreclosure state this time of year. Foreclosures are going down. Hmmm, interesting. What do you think that means for the investor market? I’d love to hear your ideas on this as I have ideas of my own. Enjoy the read!
By Amber Nelson December 12, 2013 12:00 AM
Total U.S. foreclosures fell last month to the lowest point in seven years, according to foreclosure data market RealtyTrac, a sign that a slowly healing economy is also resolving the foreclosure crisis.
There were 113,454 foreclosure filings – including default notices, auctions and bank repossessions – in November, a 15 percent decrease from October and a 37 percent drop from November 2012.That represents the largest monthly decline since November 2010, when the “robo-signing” scandal forced many banks to halt foreclosure processing.
Overall, foreclosure filings are at their lowest level since December 2006 and while they are much lower than peak of the crisis when foreclosures averaged 300,000 a month, they are still significantly above the pre-mortgage meltdown average of 86,000 a month.
“While some of the decrease in November can be attributed to seasonality, the depth and breadth of the decrease provides strong evidence that we are entering the ninth inning of this foreclosure crisis with the outcome all but guaranteed,” said Daren Blomquist, vice president at RealtyTrac in a statement. “While foreclosures will likely continue to stage a weak rally in certain markets next year as the last of the distress left over from the Great Recession is dealt with, it is highly unlikely that there will be a foreclosure comeback that poses any major threat to the solid housing recovery that has now taken hold.”
The national foreclosure rate in November fell to one foreclosure action out of every 1,155 U.S. housing units. And problems are not uniform across the country. Certain states, especially those with judicial review of every foreclosure, are still struggling. Florida had the highest rate of foreclosure, followed by Delaware, Maryland, South Carolina and Illinois.
Happy Investing!
Matt W.
Foreclosures at 6 year LOW!!
Posted on: Tue, 12/17/2013 - 14:41
Foreclosures at 6 year LOW!!
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Interesting article that talks about the difference of states that process foreclosures quicker, and those that take longer to get them through the system. This was a very interesting read. Enjoy!
By Amber Nelson November 29, 2013 12:00 AM
In states where foreclosures are processed quickly, the housing recovery also moved quickly compared to those states where foreclosures have languished in the courts, according to a new study.
Pro Teck Valuation Services, a national appraisal firm, found that of the largest 30 U.S. metropolitan areas, the bottom performers were all in so-called judicial states – states where every foreclosure must go before a judge before completion. By contrast all of the top ten performing mortgage markets were in non-judicial states, with eight of them in California.
“Two years ago much of the bad news was centered on California, a non-judicial state. Foreclosures were driving down prices and there were high REO discounts,” said Tom O’Grady, CEO of Pro Teck Valuation Services in a press release. “But banks moved swiftly to cut losses, peak foreclosure activity came and went, and many markets are now on the rebound. In fact, eight of our top ten metros for this month are in California.”
When the housing bubble burst back in 2007, the nation was hit hard with wave after wave of foreclosures. Overly-inflated markets like California and Florida experienced especially high default rates as homeowners couldn’t keep up with their mortgage payments. The difference in the two states’ recoveries seems to be almost entirely due to the amount of government involvement required. California does not require courts to get involved whereas Florida does. The result is that lenders have been able to offload their inventory of foreclosures much faster while Florida still has a backlog.
“It’s hard to sustain a market turnaround when 25-50% of sales are foreclosures. When foreclosures represent a significant share of total sales and their discounted prices pull down the prices of non-distressed sales, it is known as the ‘contagion effect.’ This month, that’s what is happening in our bottom ten metros, which also happen to be in judicial states,” said O’Grady. “Even though other market fundamentals are looking good, such as recent price appreciation and shrinking inventories, foreclosures are still playing a major part in holding these real estate markets back. A stable market cannot return until foreclosures play a less active role in the market.”
Happy Investing!
Matt Walton
I believe that a drop in foreclosures represents a stronger economy, stronger job security and greater economic confidence levels among consumers. Lenders, however, still have a supply of non-listed foreclosures that they are trickling into the market. I foresee these as being a stable supply factor for at least the first two quarters of 2014.
there are still many people who are hanging by a thread, meaning, they are continuing to pay their mortgages that are tied to an adjustable rate, so while the interest rates are still low, they are still making their payments on their homes that are still underwater; so unless their properties increase in value so that they can refinance them, we will see some more notices of default in 2014.
Valerie
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