SOURCE: RealtyTrac

RealtyTrac

October 10, 2013 00:01 ET

September Foreclosure Activity Down 27 Percent From Year Ago, Marking 36 Consecutive Months With Annual Declines

Q3 Foreclosure Starts at Seven-Year Low, REOs Up From Previous Quarter; Baltimore, Las Vegas, Raleigh, Hartford, DC Among Metros Bucking Downward Trend

IRVINE, CA--(Marketwired - Oct 10, 2013) - RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, today released its U.S. Foreclosure Market Report™ for September and the third quarter of 2013, which shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 131,232 U.S. properties in September, a 2 percent increase from the previous month but a 27 percent decrease from a year ago.

September was the 36th consecutive month with an annual decrease in U.S. foreclosure activity, a downward trend that started in October 2010 when lenders and servicers were accused of improperly signing off on foreclosure documents with a practice dubbed robo-signing.

September numbers helped drop third quarter foreclosure activity to the lowest quarterly level since the second quarter of 2007. There were a total of 376,931 U.S. properties with foreclosure filings in the third quarter of 2013, down 7 percent from the previous quarter and down 29 percent from the third quarter of 2012 -- the biggest annual decrease since the second quarter of 2011. One in every 348 housing units had a foreclosure filing during the quarter.

High-level findings from the report:

  • U.S. foreclosure starts in the third quarter were at a seven-year low. A total of 174,366 U.S. properties started the foreclosure process for the first time during the quarter, down 13 percent from the previous quarter and down 39 percent from a year ago to the lowest level since the second quarter of 2006.
  • Third quarter foreclosure starts decreased from a year ago in 38 states including Colorado (down 71 percent), Arizona (down 63 percent), California (down 59 percent), Illinois (down 56 percent), and Florida (down 52 percent).
  • Third quarter foreclosure starts increased from a year ago in 11 states, including Maryland (up 259 percent), Oregon (up 252 percent), New Jersey (up 53 percent), Connecticut (up 52 percent), Nevada (up 36 percent), and New York (up 25 percent).
  • Third quarter bank repossessions (REO) decreased 24 percent from a year ago but were up 7 percent from the previous quarter. A total of 119,485 U.S. properties were repossessed by lenders in the third quarter, putting the nation on pace for close to half a million total bank repossessions for the year.
  • The quarterly increase in REOs nationwide was driven by quarterly increases in 26 states, including New York (up 65 percent), New Jersey (up 64 percent), Illinois (up 44 percent), Virginia (up 36 percent), Connecticut (up 34 percent), Indiana (up 30 percent), Nevada (up 29 percent), and California (up 19 percent).
  • Overall foreclosure activity in September decreased from a year ago in 33 states, but was up from a year ago in 16 states, including Maryland (up 230 percent), Nevada (up 97 percent), Connecticut (up 69 percent), New Jersey (up 55 percent), Pennsylvania (up 34 percent), and New York (up 22 percent).
  • September foreclosure activity decreased from a year ago in 144 of the 209 metro areas tracked in the report (69 percent), but increased from a year ago in 64 metros (31 percent), including Baltimore (up 381 percent), Las Vegas (up 109 percent), Raleigh, N.C. (up 97 percent), Hartford, Conn., (up 74 percent), Washington D.C., (up 52 percent), Philadelphia (up 32 percent), and New York (up 25 percent).

"The September and third quarter foreclosure numbers show a housing market that is haltingly returning to health," said Daren Blomquist, vice president at RealtyTrac. "In a healthy housing market foreclosures are rare but streamlined while still protecting the rights of the homeowner. While foreclosures are clearly becoming fewer and farther between in most markets, the increasing time it takes to foreclose is holding back a more robust and sustainable recovery.

"The sharp jumps in foreclosure activity in some local markets may come as a surprise to some," Blomquist added. "These spikes in activity demonstrate that while millions of distressed homeowners have been pulled back from the precipice by foreclosure prevention programs over the past several years, once those programs expire or are exhausted, a percentage of these troubled homeowners are still susceptible to falling into foreclosure. In addition even slight economic downturns at the local or regional level can push these homeowners hanging on by a thread over the edge."

Local broker quotes
"Foreclosures have declined dramatically in Northern Nevada and the foreclosure level is quickly approaching national averages; however, Senate Bill 300 is having an effect on housing statistics in this market by contributing high levels of variability in monthly foreclosure levels," said Craig King, COO of Chase International brokerage, covering the Reno, Nev., and Lake Tahoe markets. "Lenders are changing forms and paperwork to correspond to new laws, and they believe the foreclosure processes will be dramatically slowed for the next several months."

"Ohio's employment growth in recent months, coupled with low inventory levels, has enabled much of the backlogged REO inventory to be sold. This has provided a more balanced housing market, enabling non-homeowners in Ohio to explore homeownership options," said Michael Mahon, Executive Vice President/Broker, HER Realtors, covering the Columbus, Cincinnati and Dayton markets in Ohio. "While we continue to see foreclosures occur, this inventory is based on current actions being taken against consumers in default, and not backlogged actions from lenders' inaction due to property value and regulatory concerns."

"While foreclosures aren't as prevalent as they once were, it's difficult to say that Portland, or any other metropolitan area, has completely passed the foreclosure issue when there are so many variables to consider such as job growth," said Brian Allen, president and co-owner of Windermere / Cronin & Caplan Realty Group in Portland, Ore.. "However, the numbers are pointing to a more balanced market in Portland."

"The bay area housing market in Northern California is balanced and healthy," said Gretchen Pearson, President of Prudential California Realty, San Ramon. "There are a few remnants of distressed properties left from Fannie Mae, but families are now able to move up in the housing market as sellers are accepting contingent sales, and that is a great sign."

"The Northern Utah markets from Ogden through Salt Lake have showed great strength in the past few months both in price appreciation and numbers of homes sold," said Steve Roney, CEO of Prudential Utah Real Estate. "Northern Utah is in a much better housing market position than last year, but inventory remains light compared to buyer demand."

"The Middle-Tennessee market is continuing to improve. Housing prices are steadily climbing, inventory is increasing slightly and this has been a good year for buyers and sellers alike," said Bob Parks, CEO of Bob Parks Realty, covering the Middle-Tennessee market, including Nashville. "We are experiencing favorable conditions in the mid-Tennessee area, which is contributing to our recovering housing market."

"The Oklahoma City and Tulsa metro areas are continuing to experience a slower-paced housing market compared to previous months," said Sheldon Detrick, CEO of Prudential Detrick/Prudential Alliance Realty covering the Oklahoma City and Tulsa markets. "This could be due to a seasonal slowing of the housing market, and the current gridlock in Washington could be having an effect on the number of people buying and selling their homes at this time."

Florida, Nevada and Maryland post top state foreclosure rates in the third quarter
Florida foreclosure activity in the third quarter decreased 8 percent from a year ago following six consecutive quarters with annual increases in foreclosure activity, but the state still posted the nation's highest foreclosure rate during the quarter. A total of 70,902 Florida properties had foreclosure filings in the third quarter, down 7 percent from the previous quarter and a rate of one in every 126 housing units -- more than twice the national average.

Nevada foreclosure activity in the third quarter increased 10 percent from the previous quarter and was up 21 percent from a year ago. The state's foreclosure rate ranked second highest in the nation. A total of 9,033 Nevada properties had foreclosure filings in the third quarter, a rate of one in every 128 housing units.

A 180 percent year-over-year increase in foreclosure activity helped boost Maryland's third quarter foreclosure rate to third highest among the states. A total of 11,617 Maryland properties had foreclosure filings during the quarter, up 6 percent from the previous quarter and a rate of one in every 204 housing units.

Third quarter foreclosure activity decreased from a year ago in both Illinois and Ohio, but the states still posted the nation's fourth and fifth highest foreclosure rates respectively. Indiana and South Carolina also ranked among the top 10 state foreclosure rates in the third quarter, at No. 9 and No. 10 respectively, despite annual decreases in foreclosure activity.

Third quarter foreclosure activity increased from a year ago in Connecticut, Delaware and New Jersey, and these states posted the nation's sixth, seventh and eighth highest state foreclosure rates respectively during the quarter.

Florida cities account for 8 of top 10 metro foreclosure rates in the third quarter
With one in every 83 housing units with a foreclosure filing in the third quarter, the Port St. Lucie metro area in southeast Florida posted the nation's highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more.

Seven other Florida cities posted foreclosure rates among the 10 highest nationwide in the third quarter: Jacksonville at No. 2 (one in every 96 housing units with a foreclosure filing); Miami at No. 3 (one in every 101 housing units); Palm Bay-Melbourne-Titusville at No. 4 (one in every 102 housing units); Ocala at No. 6 (one in every 120 housing units); Tampa at No. 7 (one in every 120 housing units); Orlando at No. 8 (one in every 134 housing units); and Pensacola at No. 9 (one in every 153 housing units).

Other metro areas with foreclosure rates ranking among the 10 highest were Las Vegas at No. 5 (one in every 109 housing units with a foreclosure filing) and Rockford at No. 10 (one in every 155 housing units).

Average time to complete foreclosure up to 551 days nationwide
U.S. properties foreclosed in the third quarter of 2013 were in the foreclosure process an average of 551 days, up 5 percent from 526 days in the second quarter and up 44 percent from 382 days in the third quarter of 2012.

The average time to foreclose was 1,037 days in New York, the longest of any state, followed by New Jersey (1,014 days), Florida (929 days), Illinois (828 days) and Connecticut (693 days).

The average time to foreclose was 160 days in Maine, the shortest of any state, followed by Texas (164 days), Alabama (185 days), Virginia (189 days) and Delaware (202 days).

Report Methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month and quarter -- broken out by type of filing. Some foreclosure filings entered into the database during a month or quarter may have been recorded in previous months or quarters. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac's report incorporates documents filed in all three phases of foreclosure: Default -- Notice of Default (NOD) and Lis Pendens (LIS); Auction -- Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the quarterly report, if more than one foreclosure document is received for a property during the quarter, only the most recent filing is counted in the report. Both the quarterly and monthly reports check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property again in the current month or quarter.

Click here to learn about RealtyTrac's report methodology and to view detailed data by state.

Report License
The RealtyTrac U.S. Foreclosure Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

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About RealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is the nation's leading source of comprehensive housing data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts®. RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.