RealtyTrac: Foreclosures Plummet 37% — But Not Everywhere

Foreclsoures fall in many major metro areas

Foreclosures have fallen through the floor. RealtyTrac reports that November foreclosure figures were 37 percent lower than a year ago and that foreclosure starts are at a 95-month low.

“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. “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.”

Foreclosure activity — one of the dominant housing stories for the past five years — may be down but it is surely not out. While most states have seen substantial reductions, foreclosure levels are actually on the rise in a number of states when compared with 2012. RealtyTrac said that “November foreclosure starts increased from a year ago in 15 states, including Pennsylvania (up 233 percent), Delaware (up 104 percent), Maryland (up 74 percent), Oregon (up 38 percent), and Connecticut (up 37 percent).

Higher foreclosure rates do not necessarily mean that states and local areas are again seeing tough real estate markets. In Maryland, for example, foreclosure activity is up because many auctions were put on hold between late 2010 and early 2013 to resolve a legal issue involving mortgage note ownership. With the case settled earlier this year a backlog of deferred cases has now been opened, leading to higher current foreclosure rates.

Foreclosures And Stats

  • A total of 52,826 U.S. properties started the foreclosure process for the first time in November, down 10 percent from the previous month and down 32 percent from a year ago to the lowest level since December 2005, when 49,236 U.S. properties started the foreclosure process.
  • There were a total of 30,461 U.S. bank repossessions (REO) in November, down 19 percent from the previous month and down 48 percent from a year ago to the lowest level since July 2007, a 76-month low.
  • Only five states posted year-over-year increases in REOs: Delaware (179 percent increase), Maryland (41 percent increase), Connecticut (9 percent increase), Maine (6 percent increase), and Iowa (2 percent increase).
  • Scheduled foreclosure auctions (which are foreclosure starts in some states) in November increased from a year ago in 19 states, including Oregon (726 percent increase), Massachusetts (217 percent increase), Utah (214 percent increase), Connecticut (199 percent increase), Delaware (104 percent increase), and New York (34 percent increase).
  • States with the highest foreclosure rates were Florida, Delaware, Maryland, South Carolina, and Illinois. Among metro areas with a population of 200,000 or more, those with the highest foreclosure rates were the Florida cities of Jacksonville, Miami, Port St. Lucie and Palm Bay, along with Rockford, Ill.
  • Among the nation’s 20 largest metro areas, those with the highest foreclosure rates were in Miami, Tampa, Chicago, Riverside-San Bernardino in Southern California, and Baltimore. Only three of the 20 largest metros posted annual increases in foreclosure activity: Baltimore (up 46 percent), Philadelphia (up 34 percent), and Washington, D.C. (up 6 percent).

“The Middle Tennessee housing market continues on a stable path maintaining overall market stability,” said Bob Parks, CEO of Bob Parks Realty, covering the Nashville and middle Tennessee market. “We are enjoying a decline in foreclosure rates in line with the national average, which has allowed for an increase in home values, stabilization of home prices, and positive, consistent housing numbers we haven’t seen in five years.”

“The foreclosure trends in the Northern Utah housing market are aligned with, if not a little better, than what we’re experiencing on a national level,” said Steve Roney, CEO of Prudential Utah Real Estate, covering the Salt Lake City and Park City, Utah, markets. “Foreclosures continue to decline and it’s beginning to feel like a ‘normal’ housing market again.”

“Most of the shadow inventory has been worked through in the Ohio housing market, and this inventory is being absorbed quickly,” said Michael Mahon, Executive Vice President/Broker at HER Realtors, covering the Dayton, Columbus and Cincinnati, Ohio markets. “The decreasing amount of time it’s taking for properties to go through the foreclosure process is enabling lenders to keep properties in more stabilized conditions, which attracts higher prices and has assisted in creating moderate increases in appraised home values throughout the state.”

“Foreclosures continue to steadily decrease every month as the banks are catching up with their ghost and zombie foreclosure properties,” said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty, covering the Oklahoma City and Tulsa, Okla., markets. “There will always be defaults, but it’s clear that we are working our way back towards a normal housing market.”

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