Foreclosure Market Yields Mixed Figures

Provided By Realty Times

There was a significant decline in foreclosure filings for the firhttp://www.blogger.com/img/blank.gifst half of 2011, down 25 percent from the previous six months. Foreclosure activity has also slowed 29 percent from the first half of quarters 2010. June, however, posted a 4 percent gain. The latest RealtyTrac data now indicated that "0.90 percent of all U.S. housing units (one in 111) had at least one foreclosure filing in the first half of the year."

According to RealtyTrac®, "Processing and procedural delays are pushing foreclosures further and further out – we estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later. This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number.”

The translation? The figures we currently see may not reflect the true state of distressed properties. On average, a property takes 318 days from the initial notice to complete the process, up almost a month from previous averages. Some states take considerably longer, with New York leading the way at 966 days, or a staggering two and a half years. This means homes that entered the process in the last year won't complete filing until 2013. New Jersey followed a close second at 944 days, while Florida takes 676 days.

The National Association of Realtors®' most recent existing-home sales data indicated that distressed homes, defined as foreclosures and short sales, made up 30 percent of all June sales, down only marginally from 31 percent seen in May and 32 percent in June 2010.

If the foreclosure rate declines seen in the first half of this year have only been temporary, there will be a marked effect on the housing market. If this rate heats back up, as some experts predict, property values could once again plummet. Neighborhood home values are strongly affected by foreclosure sales, generally sending sale prices downward all across the board. If home values continue to fall, we could see even more homeowners upside-down in their loans, putting the brakes on market activity once again.

California still leads the way with the bulk of foreclosures. According to RealtyTrac, the state has seen filings decline by 13 percent in the last six months, but they still posted 263,500 new foreclosure filings for the first half of 2011.

Nevada, however, leads the way in the highest rate of foreclosure. Almost 5 percent of its housing is in foreclosure. RealtyTrac reports, "Overall Nevada foreclosure activity decreased on a year-over-year basis for the fifth straight month in June despite a 19 percent year-over-year spike in REO activity."

We'll see if July follows suite after June and posts another rise in foreclosure filings. "It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market,” said James J. Saccacio, chief executive officer of RealtyTrac. "Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn't appear to be the case."

Are you interested in learning more about foreclosures in your area? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.