South Orange County Blog from Bob Phillips

RealtyTrac Foreclosure Report Shows 28% Decrease From May 2012

RealtyTrac Foreclosure Report Shows 28 Percent Decline From May 2012

Foreclosure actions increased by 2.0 percent in May from April’s 75 month low point for foreclosure activity according to RealtyTrac’s U.S. Foreclosure Market Report released June 11. However, the good news is that May 2013 foreclosure filings were still 28 percent below May 2012 filings.

RealtyTrac reports that approximately one in 885 homes were in some stage of foreclosure in May. This does not mean that 1 in 885 homes was lost to foreclosure, but it does indicate that documents related to some phase of foreclosure (Notice of Default, Notice of Trustee Sale, and Bank Reposession) were filed.

Actual lender repossessions (REO) increased by 11 percent in May, but were down by 29 percent as compared to May 2012. 33 states reported increases in REOs with North Carolina, Oregon and Wisconsin having the highest numbers of REO properties added.

Judicial Foreclosure States Lagging In Clearing Foreclosure Inventory

Foreclosure starts were up by 4 percent in May, but were 33 percent lower than for May of 2012. States using judicial foreclosure proceedings were 5 of the top 6 states for foreclosure filings. The state of Nevada, which uses non-judicial foreclosure proceedings, was second after Florida and ahead of Ohio, South Carolina and Illinois.

In general, judicial foreclosure proceedings take longer to complete than non-judicial foreclosures. This results in homes being unavailable for sale for longer periods of time. Lenders are required to complete the foreclosure process and in some cases, they must await expiration of a redemption period before a foreclosed home can be repaired and sold.

In states using non-judicial foreclosure proceedings, the time between the initial foreclosure filing and the foreclosure sale can be as little as three to four months. Quickly turning over foreclosed homes is helpful for improving regional housing markets and making more homes available for purchase. Economists have recently cited low inventories of homes as holding back housing markets in some areas.

California is NOT a judicial foreclosure state, and bank owned properties are a very small percentage of our present inventory.

A lot has been said – by doom and gloom bloggers, and their followers – over the past few years, about the so called “shadow inventory” of foreclosure houses, just waiting for prices to come up before being unleashed upon the public – thereby pushing prices back downward.

If such a myth was anywhere close to being accurate, this past 12 months of lower housing inventory WOULD have been the ideal time for lenders to have taken advantage of.  Instead, the reduction of the number of the REO’s ( Bank owned properties.) coming onto the local California real estate market has actually worsened the problem – helping to make prices rise, in almost unprecedented fashion.

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Bank Repossessions Slip For 24th Consecutive Month

Posted in Housing Analysis by southorangecounty on November 16, 2012

Foreclosures per household October 2012

According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings increased 3 percent in October as compared to September 2012, climbing to 186,455 U.S. properties.

RealtyTrac defines a “foreclosure filing” as any foreclosure-related action including a Notice of Default, a Scheduled Auction, or a Bank Repossession. On average, 1 in every 706 U.S. homes had a foreclosure filing during the month of October.

For the 24th consecutive month, the number of bank repossessions fell, down less than 1% from the previous month and down 21% from October 2011. Bank repossessions dropped in 37 states, plus the District of Columbia, indicating that banks are seeking alternatives to foreclosure.

Distressed home sales, which include foreclosures and short sales, represented 23% of sales in the second quarter of 2012, down from 30% a year ago, according to the National Association of REALTORS®.

Florida again posted the top foreclosure rate nationwide.

One in every 312 Florida housing units had some sort of foreclosure filing in October as foreclosure starts moved to a 12-month high. Monthly filings increased 2% from last month.

In Nevada, the monthly increase was larger, rising 41% month-over-month, lifting it from the fifth-highest rate in September 2012, to the second-highest in October 2012.

Third-ranked Illinois saw a 6% increase in foreclosure filings over September 2012. California and Arizona rounded out the top five.

Hurricane Sandy made an impact on the foreclosure market, too, with a foreclosure moratorium being put into effect in the states most affected such as New Jersey, New York, and Connecticut.

For South Orange County home buyers planning to venture into the home foreclosure market, there are well-priced homes for sale. However, understand that a foreclosure property is often sold “as is,” and that you may not be allowed into the property prior to the sale to inspect for damage. Home may have termites, been gutted by previous tenants or owners, or be filled with lead paint or asbestos.

For this reason, it’s a good idea to engage an experienced real estate professional when buying foreclosure properties. Real estate agents can guide you through the foreclosure process and give advice regarding contracts and home inspections.

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RealtyTrac: Foreclosures Down 16% Over Past 12 Months

Foreclosures : September 2012

Foreclosure volume continues to slip.

According to foreclosure-tracking firm RealtyTrac, in September, the number of foreclosure filings nationwide fell 7 percent from the month prior, and fell 16 percent from September 2011.

RealtyTrac defines a “foreclosure filing” as any of the following foreclosure-related events : (1) A default notice on a home; (2) A scheduled auction for a home; or, (3) A bank repossession of a home.

September’s 180,427 foreclosure filings mark the lowest monthly total in more than 5 years. It’s a signal that the U.S. housing market is in recovery, while also reflecting the success with which banks and homeowners have found alternatives to the foreclosure process, including the short sale.

Based on data from the National Association of REALTORS®, short sales now account for 45 percent of “distressed” home sales nationwide/ As recently as April, the percentage of short sales was just 39 percent.

Other noteworthy statistics from the September 2012 foreclosure report include :

  • Default Notices fell 12% between August and September 2012
  • In Q3 2012, quarterly foreclosure filings fell for the 9th straight quarter
  • The average time to foreclose on a home rose to 382 days nationwide, the highest since early-2007

In addition, in September, Florida posted the top foreclosure rate nationwide for the first time since April 2005.

Foreclosure starts moved higher in the Sunshine State for the 11th straight month and bank repossessions are now up 23 percent as compared to September 2011. 1 in every 318 Florida homes received some form of foreclosure filing last month.

The national average was 1 in 730.

Whether you’re a first-time home buyer or an experienced one, homes in various stages of foreclosure have allure. They tend to sell for lower prices compared to non-distressed properties, for example. Buyers should look beyond just the “list price”, as distressed properties are usually sold as-is which means that homes may be defective and uninhabitable.

This might render the home un-lendable, too, for buyers who require bank financing.

If you’re looking to buy – or sell – a distressed property in South Orange County, be sure to engage a distressed property specialist – like me. As a CDPE ( Certified Distressed Property Expert.) agent, I am both trained and experienced in these type of transactions.

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Foreclosures Remain Concentrated In Just A Few States

Posted in Housing Analysis by southorangecounty on September 18, 2012

Foreclosure concentration August 2012The national market for foreclosed homes remains strong.

According to foreclosure data firm RealtyTrac, foreclosure activity increased 1 percent in August as compared to the month prior, climbing to just above 193,500 units nationwide.

1 in every 681 U.S. households received some form of foreclosure filing last month where a “foreclosure filing” is any one of the following foreclosure-related events : A default notice on a home; a scheduled auction for a home; or, a bank repossession of a home.

Default notices climbed in August which indicates that more U.S. homeowners are falling behind on payments.

However, for the 22nd consecutive month, the number of bank repossessions fell. This suggests that lenders are reaching alternative outcomes to foreclosure more frequently, and with more success, reducing the number of homes for sale nationwide.

Fewer homes for sale is one reason why U.S. home prices have been rising.

Like everything in real estate, though, foreclosures are a local event. In August, just six states accounted for more than half of the country’s bank repossessions. Those six states — California, Florida, Georgia, Illinois, Michigan and Arizona — account for less than 31% of the U.S. population.

Clearly, foreclosures remain concentrated. However, bank-owned homes can still make for “good deals” across all 50 states. This is because foreclosed homes are typically sold at steep discounts versus comparable, non-distressed homes.

Just be sure to do your foreclosure research first.

Buying a home in foreclosure is different from buying a home not in foreclosure. The contract and negotiation phases are different, and foreclosed homes are often sold as-is.

“As-is” is real estate-speak for “this home may be defective and/or uninhabitable”.

Therefore, if you plan to buy foreclosure, talk with a real estate professional first. You can learn a lot about a foreclosure by doing research online. However, when it comes time to write a contract, you’ll want to have an expert on your home-buying team.

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5 States Home To 50% Of Foreclosure Activity Nationwide

Posted in Housing Analysis by southorangecounty on August 10, 2012

Foreclosure stats July 2012Foreclosure pipelines are re-filling nationwide.

According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings dipped below 192,000 in July 2012, a 3 percent decrease from the month prior.

RealtyTrac defines a “foreclosure filing” as any foreclosure-related action, including a Notice of Default, a Scheduled Auction, or a Bank Repossession.

July marks the 22nd straight month during which foreclosure filings fell on a year-over-year basis. At some point soon, however, that streak may end. This is because, for the third straight month, on an annual basis, foreclosures starts are on the rise.

More than 98,000 homes started the foreclosure process in July, a 6 percent increase from July of last year. Connecticut, New Jersey and Pennsylvania experienced the biggest increases, rising 201%, 164% and 139%, respectively.

Each is a judicial foreclosure state, which means that foreclosures must go through the state court system prior to auction.

Nationwide, just a few states accounted for the majority of July’s total foreclosure activity. 5 states were home to more than half of all tracked activity, according to RealtyTrac.

  • California : 21.9 percent
  • Florida : 13.3 percent
  • Illinois : 7.2 percent
  • Georgia : 5.7 percent
  • Texas : 5.2 percent

Collectively, these 5 states represent just 33 percent of the nation’s population.

In contrast to the five states above, the bottom 14 states accounted for just 1 percent of the nation’s foreclosure activity, led by North Dakota. In North Dakota, just 3 foreclosure filings were made in July. Other “fewest foreclosure” states in July included District of Columbia (7 filings), Vermont (31 filings), and South Dakota (63 filings).   

For home buyers in South Orange County , with more foreclosed properties expected to go for sale this year and next, there will be some excellent “deals” and discounts — foreclosed homes typically sell at discounts of 20% or more as compared to comparable, non-distressed homes. However, foreclosed homes are often sold as-is, which means they may have defects.

Before placing a bid on a foreclosed home, therefore, make sure to have an experienced real estate agent on your side. Buying a foreclosed home may save you money at your closing, but may cost you money longer-term.

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Foreclosure Starts Rise For Second Straight Month

Posted in Housing Analysis by southorangecounty on July 17, 2012

Foreclosure changes June 2012

The number of U.S. homes receiving foreclosure notices topped one million through the first six months of 2012, according to RealtyTrac.

There were 1.046 million foreclosure filings between January – June 2012, says the foreclosure-tracking firm in its Midyear 2012 Foreclosure Market Report. The tally represents a 2 percent increase from the immediate six months prior.

A “foreclosure filing” includes all of the following foreclosure-related actions : (1) Default notices, (2) Scheduled auctions, and (3) Bank repossessions.

One notable fact from within the report is that, even as the number of repossessed homes dropped nationwide, the number of homeowners receiving a Notice of Default or lis pendens rose. These notices are the first step in the foreclosure process which means that we should expect the national foreclosure pipeline to fill later this year.

It’s no coincidence that foreclosure starts are rising now, either.

Earlier this year, a $25 billion mortgage servicing settlement provided banks with the necessary framework and rules by which they can foreclose upon a home. Prior to the this settlement, fearing legal liability, some banks chose to slow — or halt — foreclosure starts entirely. Since the settlement’s announcement, though, foreclosure activity has resumed.

For today’s South Orange County home buyers, the foreclosure market represents an interesting opportunity. Homes purchased while in the various stages of foreclosure can often be purchased for a lower price than homes which are not in foreclosure; one reason why foreclosed homes account for 25 percent of all home resales.

However, be careful that you don’t confuse “less expensive with “less costly.

Foreclosed homes are often sold as-is and may be in various stages of disrepair at the time of purchase. Spending money to repair a foreclosed home in order to make it habitable could wipe out the money saved on its sales price. Your best real estate “deal”, therefore, may be a non-distressed home in sound, move-in ready condition.

If you’re thinking of buying a distressed property, whether it’s an REO ( Bank owned.) or a short sale, be sure to talk with a real estate agent who has experience in all facets of the process. The process of buying a distressed property is different from buying a “regular” home. You’ll want somebody who can help you navigate this process on your team. Someone like me.

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Georgia Takes Top Foreclosure Spot For First Time Since 2006

Posted in Housing Analysis by southorangecounty on June 15, 2012

Foreclosure concentration June 2012

According to foreclosure data firm RealtyTrac, the number of foreclosure filings nationwide rose 9 percent in May as compared to April 2012. Filing topped 200,000 units for the first time in 3 months.

The term “foreclosure filing” is a catch-all term comprising default notices, scheduled auctions, and bank repossessions. On average, 1 in every 639 U.S. homes receiving a foreclosure filing in May.

As in most months, foreclosure activity was concentrated by state. Just 6 states accounted for more than half of the nation’s total filings.

Those six states were :

  1. California : 13.6% of all repossessions
  2. Florida : 11.0% of all repossessions
  3. Georgia : 9.8% of all repossessions
  4. Illinois : 6.6% of all repossessions
  5. Michigan : 6.5% of all repossessions
  6. Arizona : 6.3% of all repossessions

An interesting note, though, is that for the first time since February 2006, Georgia was the country’s most foreclosure-heavy state, displacing Nevada, which has dominated the foreclosure landscape for the last 5 years.

1 in 300 Georgia homes received a foreclosure filing in May. The national average last month was 1 in 639 homes.

At the other end of the foreclosure spectrum is Vermont. There was just 1 foreclosure filing for every 15,539 homes in The Green Mountain State last month.

Meanwhile, distressed homes remain in high demand with today’s home buyers, accounting for 28 percent of April’s overall existing home sales based on data from the National Association of REALTORS®. However, if your home purchase plans call for buying a foreclosed or bank-owned home, make sure you do your research first.

Buying bank-owned property is a different process as compared to buying a non-distressed home. The purchase contracts are different, the buyer-seller negotiations are different, and the homes are sometimes sold with defects. This can make it difficult to get a mortgage — or even impossible.

Before buying “distressed”, therefore, be sure to with a real estate agent. It’s good to have an experienced agent on your side to coach you through the process.

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Foreclosures Fall To 5-Year Low

Posted in Housing Analysis by southorangecounty on May 30, 2012

Foreclosures April 2012

Foreclosures filings fell 5 percent between March and April of this year, and by 11 percent as compared to one year ago. The data comes from RealtyTrac. The foreclosure-tracking firm tallied fewer than 189,000 foreclosure-related actions last month — the fewest number since July 2007.

Rapidly-declining foreclosure figures are another signal that the U.S. housing market may already be in recovery.

According to RealtyTrac’s methodology, a “foreclosure filing” is any one of the following foreclosure-related events : (1) A default notice on a home; (2) A scheduled auction for a home; or, (3) A bank repossession of a home.

All three showed improvement in April :

  • Default Notices were down 4% from March 2012
  • Scheduled Auctions were down 4% from March 2012
  • Bank Repossessions were down 7% from March 2012

Furthermore, April’s bank repossessions figure is notable. With just 51,415 homes reclaimed by banks, last month’s total represents a 26 percent drop from April 2011, and is the 18th consecutive month during which bank repossessions fell. This figure suggests that banks are seeking alternatives to foreclosure, including loan modifications and short sales, when appropriate.

Indeed, the National Association of REALTORS® reports that 11 percent of April’s home resales were short sales.

Whether you’re a first-time home buyer or an experienced one, homes in various stages of foreclosure can be alluring. They’re readily available and often come cheap as compared to non-distressed properties. However, make sure to look beyond just the “list price”. Foreclosed homes are often sold as-is. This means that the property could be run-down or rife with defects that render it uninhabitable and/or un-lendable.

If you’re thinking of buying a foreclosed property in South Orange County, therefore, engage an experienced real estate professional, like myself, who has experience in such transactions. You can learn a lot about how foreclosures work by doing research on the internet, but when it comes to writing contracts and checking homes for defects, you’ll want an experienced agent on your side.

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Nevada Relinquishes “Top Foreclosure State” Title

Posted in Housing Analysis by southorangecounty on April 19, 2012

Foreclosures March 2012

According to foreclosure-tracking firm RealtyTrac, foreclosure filings fell to 199,000 in March 2012, a 17 percent decrease from March 2011. Last month marks the first time since July 2007 that foreclosure filings numbered less than 200,000 on a monthly basis — a span of nearly 5 years.

The generic term “foreclosure filing” is used to group all types of foreclosure activity into a single reading. It includes default notices, scheduled auctions, and bank repossessions. 

As in most months, foreclosure density varied by region. 6 states accounted for more than half of the nation’s repossessed homes in March.

  • Florida : 13.6 percent of all bank repossessions
  • California : 12.0 percent of all bank repossessions
  • Georgia : 8.0 percent of all bank repossessions
  • Michigan : 7.5 percent of all bank repossessions
  • Arizona : 6.5 percent of all bank repossessions
  • Illinois : 6.4 percent of all bank repossessions

At the other end of the spectrum, North Dakota and Washington, D.C. were home to the fewest bank repossessions, with 0.03% and 0.02% of the national total, respectively.

Also noteworthy is that the RealtyTrac report revealed that Nevada relinquished its title as Top Foreclosure State after 62 consecutive top-ranking months. In March, 1 in every 301 Nevada homes received some form of a foreclosure filing. The March rate was a nation-topping 1 in 300 in neighboring Arizona.

For Coto de Caza home buyers, today’s foreclosure market represents an interesting opportunity. 

Homes purchased while in the various stages of foreclosure can often be bought at lower prices relative to homes not in foreclosure. It’s one of the reasons why foreclosed homes now account for 20 percent of all home resales

However, don’t confuse less expensive for less costly.

Foreclosed homes are often sold “as-is” and may be in various stages of disrepair. Fixing a foreclosed home to make it habitable could wipe out the money saved on its price tag. Your best real estate “deal”, therefore, may be a non-distressed home in sound, move-in ready condition.

If you’re buying foreclosures — or even considering it — be sure to talk with a real estate agent first. The process of buying a foreclosed property is different from buying a “regular” home. You’ll want somebody experienced on your team.

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Foreclosure Volume Slated To Rise This Spring

Posted in Housing Analysis by southorangecounty on March 16, 2012

Foreclosure increases by state Feb 2012

After a series of months during which foreclosure volume was low, total filings have started to rise again, says RealtyTrac. 

In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.

A “foreclosure filing” is defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession.

Nationally, the number of foreclosure filings fell 2 percent from January. However, it’s a trend that may reverse. Foreclosure volume is expected to rise over the next few months.

This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the absence of such guidance. 

Like all things in real estate, though, foreclosures remain local.

For example, nationally, there was one foreclosure for every 637 housing units. On a state-by-state basis, however, the results looked different.  

  • Nevada : 1 foreclosure for every 278 housing units
  • California : 1 foreclosure for every 283 housing units
  • Arizona : 1 foreclosure for every 312 housing units
  • Georgia : 1 foreclosure for every 331 housing units
  • Florida : 1 foreclosure for every 341 housing units

Even on a city-by-city level, foreclosure concentration varied. Figures from several select cities include : 

  • Atlanta : 1 foreclosure for every 244 housing units
  • Chicago : 1 foreclosure for every 302 housing units
  • New York : 1 foreclosure for every 3,439 housing units
  • Seattle : 1 foreclosure for every 1,229 housing units
  • Washington : 1 foreclosure for every 1,198 housing units

One reason why foreclosure concentration is worth tracking is because homes in various stage of foreclosure are often sold at deep discounts as compared to similar, non-distressed homes. It’s no wonder foreclosed homes are in high demand among today’s Rancho Santa Margarita home buyers. 

However, if you plan to buy a foreclosure in California , be sure to work with an experienced real estate agent. Foreclosed homes are often sold “as-is”, and may be defective at best and uninhabitable at worst. It makes good sense to have an advocate on your side to help with contracts and inspections.

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