U.S. foreclosure activity in June actually decreased 3% form the prior month, but year over year saw a ginormo jump — up 53 percent from June 2007.
Here are the key data bullet points:
• One in every 501 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction;
• Foreclosure filings — default notices, auction sale notices and
bank repossessions — 252,363 U.S. properties during the month;• June was the second consecutive month of more than a quarter
million properties receiving foreclosure filings;• Bank seizures REOs in June were up 171% from a year ago, while Default
notices were up 38% and auction notices were up 22%; This means repossessions (REO) are increasing at a much
faster pace than default notices• Nevada, California and Arizona post top state foreclosure rates,
while California, Florida, Ohio report highest foreclosure totals;• One in every 192 California properties received a foreclosure filing in June (2nd in nation and
2.6 times the national average);• California and Florida cities account for 9 of top 10 metro rates
• Las Vegas continued to be the only city outside of California and Florida with a foreclosure
rate ranking among the top 10.
Foreclosure Map
click for bigger map
Foreclosure chart
Sources:
FORECLOSURE ACTIVITY DECREASES 3 PERCENT IN JUNE
Foreclosure Activity Up 53 Percent From June 2007
RealtyTrac July 10, 2008
http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=4873&accnt=64847
Foreclosures Rose 53% in June, Bank Seizures Triple
Dan Levy
Bloomberg, July 10 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=abT98mv4UtNI
Foreclosure Activity Deflating or Just Deferred?
Realty Trac, July 10, 2008 1:59 AM
http://www.foreclosurepulse.com/archive/2008/07/07/82379.aspx
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This is a relative risk issue. I’m not suggesting that foreclosures are not a problem, but bear in mind that 153% of a small number is still a small number. Aggregation like this isn’t going to be all that informative.
That map, on the other hand, shows the far more meaningful disaggregated data – a second one with geo-located rates-of-change would round out the picture.
No blue to be seen in Tennessee. Wonder what the story is there?
Do I read the bar chart right…the defaults are deeclining, so potentially the foreclosures will be declining in the coming months?
@Silver_lining:
More like the calm before the storm, as the junky ARMs written in the final frenzied stage of the bubble will be resetting over the next year.
Teaser rates and option arm loans began adjusting in July and will continue to adjust for about 12-months. The next wave of foreclosures is bigger than the last. This time period will be remembered as the eye of the storm. Its the back of the hurricane that does the most damage.
Foreclosures Up 53% Since June 2007
I have retitled the post below:
Current Count of People Who Bought Homes They Could Not Afford up 53% Since June 2007.
I’ve been curious about this for a while. If you remove California — and I suppose looking at that map Florida and Las Vegas — what does the rest of the picture look like?
I kind of suspect the rest of the country doesn’t really look much out of the ordinary. It kind of seems like California just went nuts with the boom and bust cycle but otherwise this isn’t as much of a big deal for the economy as it sounds.
Greg,
You should be in the government or on Wall Street…let’s look at the US ex-California, Florida and Nevada
Greg,
The U.S. without California? It’s somthing like the 6th largest economy in the world. That’s like saying if you don’t include financials, autos and retail stocks, equities are doing quite nicely.
On the CNBC website today, it says that the crisis at Freddie and Fannie is good news, since it signals a stock market bottom.
My guess is that the producers at CNBC want to convince everyone to bid up the financials so that they (the CNBC producers) can go short.
Hey DL,
didn’t cnbc say the same thing about Bear St.???
That wasn’t such a good call.
Also, you can’t just “remove” Cali from the equation because of how high home prices are there. I don’t know for sure but my guess is they are the highest or right up there with NYC prices on average.
Silver_lining,
No, you’re not reading it correctly. As long as the % increase of defaults is increasing, the future quantity of foreclosures will increase. You need to see the blue bars go negative for a decrease.
San Diego here, and almost each day as I drive off to the day job office, there is a new sale sign. Visited some open houses last weekends – all bank-owned or in foreclosure. Prior to around 2003 neighborhood incredibly stable – still have a half dozen or more original owners around me. A lot of these folks just kept taking one HELOC after another and refinancing over and over. And then the flippers came in. Clown from Florida tried to flip the house Florida style and quickly ran afowl of our zoning requirments. Yeah, we have permits here and things like sidewalks and requirements so that hand pourced concrete foundation can actually support the garage you’re trying to build, etc., etc. Never did get a clear picture on why the Florida connection. A lot of the guys were pretty clueless and evasive. Money laundering? I don’t know. I bought before the boom and will sit this time out. I do wonder what the hell will happen to values if it keeps going down!
Nice to see that there are no foreclosures in Yellowstone National Park!
@Ben
Thanks, I was also looking at the chart incorrectly and thinking that foreclosures would be tapering off since the bars were going down. Those are still some crazy YoY increases, despite the fact that last year’s june numbers were horrendous. I do NOT see signs of a bottom forming…
@Ben
Thanks, I was also looking at the chart incorrectly and thinking that foreclosures would be tapering off since the bars were going down. Those are still some crazy YoY increases, despite the fact that last year’s june numbers were horrendous. I do NOT see signs of a bottom forming…
Actually foreclosures were down 3% from May so I think the chart trend in defaults signals a peak. If you read the information from Tom Brown or Dick Bove, you’ll see how alot of adj ARMs have already refinancied and that defaults should start trending down b/c the 30, 60 day lates are down. The way the stats work the number can’t keep getting higher. Defaults from the last few years have already been wiped out. We’re only talking new people in these stats. The total will go up but the new defaults will decline.
While a decrease of 3% is statistically insignificant, you should know a few things about this data.
First of all, I would not trust it. RealtyTrac was so bent that Foreclosure Radar and I were putting out data ahead of them they moved the release to the 10th each month.
The problem is accurately updated data from their primary source is not avail until AFTER than. And they embargo the story by a couple of days so this months report is even worse than normal. They cannot possibly get accurate data on the 8th.
Even when we go to press about the 12th, about 10% of the counties have not reported so Radar uses more of a manual process to fill in the blanks. They do not have such processes.
The Data
Notices-of-default falling in June by such a small amount is due to ‘home owner hope’ that they can sell the home going into the summer months. Instead of not making that 3rd payment and getting and NOD, they cough up a payment to put off the NOD and try to sell the home. This just postpones a bunch of NOD’s until Aug/Sept.
In addition, subprime NOD’s have plateaud in recent months while Prime and Alt-A are beginning to spike. However, the previous slope in increase of subprime NOD to a flatline compared to the previous slight slope of increase that has turned much steeper recently for Prime and Alt-A shows we are in a little ‘valley’ or ‘eye of storm’ right now. Give it a few months when Prime and Alt-A really start kicking in as values start to tail off towards the end of summer, as they did last year in Sept. Remember, this is the first summer selling season for CA and the bubble states with no exotic loan programs. Last year we had a full slate of exotics and 2nd mortgages.
While subprime defaults were mostly caused by resets, Prime and Alt-A defaults are mostly caused by values dropping so sharply and negative equity. That is of course unless you have a pay option ARM, then it is caused by the curse of that loan program, period.
The Notice of Trustee Sales/Foreclosure Sales decreasing is simply a function of a February valley in Notice of Defaults. It takes about 3-4 months for NOD’s to turn into foreclosure sales. Again this is statistically insignificant.
The real story will be when DataQuick releases its total home sales report on about the 22nd. Last month sales were only up 1500 from Apr to May, which is the smallest jump going into a summer month ever. If sales have fallen off going into June when they should be spiking, no inventory is getting burned and the housing problem is not improving or even stabilizing.
The reason I focus on the bubble states with my foreclosure research is they make up the majority of foreclosure action. CA, fore example makes up 35% of total units and 45% of total dollar volume nationally.
DELETE THIS…Barry, if you are ready to chat our new service all all built and reporting all this by bank. -Mark
One more thing, if you look at MA, their foreclosure count is down 55.6% due to the new laws there. If you add that back in their month over month ‘improvement’ gets cut in half.
There are also several other states with large double digit decreases in foreclosure activity and I would guess that is because of Realty Trac’s desire to be first rather than accurate with their reporting.
Even if the data is “only” close, it’s shocking. I live in both Arizona and California. Arizona is in a world of hurt. But even the Bay Area is not immune; I own a house in Half Moon Bay and there have been short sales on my block.
monthly rates are the only place to look.
Has anyone yet seen a breakdown of foreclosures split by owner occupied and investment properties? I would be willing to bet that the OOs are a small relatively small percent of the total.
The map is nice, but I don’t like the fact that beige is left out of the legend. Unless I’m missing something, I can’t tell if beige means there is no data or the ratio of households to foreclosures is beyond the highest category.