July 2008 U.S. Foreclosures

Household per Property with Foreclosure Activity
Usforeclosureratesheatmapjuly2008

Source: RealtyTrac

>

One in every 464 U.S. households — 272,171 U.S. properties —  received a foreclosure filing, got a default notice, was warned of a pending auction
or were foreclosed on

during the month of July. That represents an 8% increase from the previous month, and a 55% increase year over year.

Falling prices are putting more homeowners equity underwater, and is accelerating the housing decline.

Bloomberg reported that Bank seizures rose 184% — the most since RealtyTrac reporting began in January 2005.

Bank Repossessions (REOs) accounted for 28 percent of all activity during the month, while defaults accounted for 41 percent and auction notices accounted for 31 percent. That is in contrast to REOs accounting for just 16 percent of all activity in July 2007, while defaults in July 2007 were still at 41 percent and auction were at 43 percent. This shift in percentages shows that a higher proportion of properties that enter the forecosure process are ending up repossessed by lenders.

Nevada, California, Florida posted the top state foreclosure rates (%), while California, Florida, Ohio reported the highest foreclosure totals (#).

When it comes to foreclosures, California is ground zero.

The worst area in the July report was Cape Coral-Fort Myers, Florida, where one in every 64 households received a foreclosure filing. That’s 7X the national average. The next 3 highest foreclosure cities were all in California: Merced (1 in 73), Stockton, and Modesto (1 in 82). Then came Las Vegas at # five, followed by three more California area: Riverside-San Bernardino, Bakersfield and Vallejo-Fairfield. Fort Lauderdale was #9, and Phoenix was # 10.

The CEO of RealtyTrac stated:

“Bank repossessions, or REOs, continued to be the fastest growing segment of foreclosure activity in July, posting a 184 percent year-over-year increase — compared to a 53 percent year-over-year increase in default notices and an 11 percent year-over-year increase in auction notices. The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale. RealtyTrac now has more than three quarters of a million properties in its active REO database, a number that represents approximately 17 percent of the inventory of existing homes for sale reported in June by the National Association of Realtors.”    –James J. Saccacio

Note: "Foreclosure filings" includes default notices, auction sale notices and bank repossessions.

>




Sources:
FORECLOSURE ACTIVITY INCREASES 8 PERCENT IN JULY Activity Up 55 Percent From July 2007
By RealtyTrac Staff   
RealtyTrac, August 14, 2008
http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=5041&accnt=64847

July Foreclosure Report
darenb
Foreclosure Pulse, August 14, 2008 2:00 AM
http://www.foreclosurepulse.com/archive/2008/08/13/110773.aspx

U.S. Foreclosures Increase 55%, Bank Seizures Rise to Record
Dan Levy
Bloomberg, Aug. 14 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=apnc1udScGEY&

US foreclosure filings surge 55 percent 
ALAN ZIBEL,
AP Thu Aug 14, 12:02 AM ET
http://news.yahoo.com/s/ap/20080814/ap_on_bi_ge/apfn_foreclosure_rates

Print Friendly, PDF & Email

What's been said:

Discussions found on the web:
  1. investorinpa commented on Aug 14

    Doesn’t anyone realize that you can’t continue calling a bottom in housing when these foreclosure numbers keep increasing??? More foreclosures means that prices are still going to come down, because people aren’t going to buy a foreclosure at market price. The only growing segment of the home sale market is in re-sold foreclosures. Yet building new homes continue. The fundamentals are awful.

  2. DownSouth commented on Aug 14

    $1 trillion in bank losses here we come!

  3. ben commented on Aug 14

    Barry,

    For good reason you always enourage people to look at YoY as opposed to month to month but shit, the month to month numbers don’t exactly look promising, especially given the fact that you just posted that many states changed the rules for foreclosure in July so this isn’t really telling the full story.

    I’d think that in normal conditions an 8% increase in foreclosures from one month to another would be cause for concern but I’ve never looked into that before to see if it is normal.

  4. Dan Duncan commented on Aug 14

    Hi Barry. A friend of mine who resides in Nigeria received the following email this morning. Looks quite promising. Thought I’d pass it on in case any of your readers wanted to get involved and make some serious mullah!!!!

    FROM: Dr Ben Bernanke
    Central Bank of United States of America
    01-658-555-1234

    TO: CEO
    Lagos, Nigeria

    Dear Friend:

    I have been requested by the regional members Federal Reserve of the USA to contact you for assistance in resolving a matter. The Federal Reserve of the USA has recently concluded a large number of contracts for credit derivative investment vehicles “CDIV” in the Wall Street region of the USA. The contracts have immediately produced moneys equaling US$40,000,000. The Federal Reserve of the USA is desirous of CDIV in other parts of the world, however, because of certain regulations of the USA Government, it is unable to move these funds to another region.

    Your assistance is requested as a non-USA citizen to assist the Federal Reserve of the USA, and also the investment bank community of Wall Street USA, in moving these funds out of USA. If the funds can be transferred to your name, in your Nigerian account, then you can forward the funds as directed by the Federal Reserve of USA. In exchange for your accommodating services, the Federal Reserve of USA would agree to allow you to retain 10%, or Nigerian $4 million of this amount.

    However, to be a legitimate transferee of these moneys according to USA law, you must presently be a depositor of at least $100,000 in a USA bank which is regulated by the Central Bank of USA.

    If it will be possible for you to assist us, we would be most grateful. We suggest that you meet with us in person in New York, NY USA, and that during your visit I introduce you to the representatives of the Wall Street USA, as well as with certain officials of the Central Bank of USA.

    Please call me at your earliest convenience at 18-555-1234. Time is of the essence in this matter; very quickly the USA Government will realize that the Central Bank is maintaining this amount on deposit, and attempt to levy certain depository taxes on it.

    Yours truly,

    The Esteemed Arch-Chairman

  5. Sailorman commented on Aug 14

    I recently purchased a foreclosed house. Wachovia, the bank that owned it, made two major mistakes: it overpriced the house and under budgeted the maintenance to the point of ridiculousness.

    The electricity budget was 20 dollars a month, so the local manager was forced to turn it off. The roof leaked, but no money to fix it. The house filled with mold and sat on the market over a year.

    They finally reduced the price by 40% and I bought it. In addition, they had to spend $40,000 to get rid of the mold. Had they priced it properly when they first took possession and maintained it, their net would have been at least $100,000 more!

  6. Winston Munn commented on Aug 14

    That gives the phrase “Red State” a whole new meaning.

  7. GB commented on Aug 14

    My wife and I are looking at REOs for my first home purchase. (8 years of slumming it in rentals was tough). The problem is that banks take a long time to get down to 30% below market value plus it takes a good year from the foreclosure filing in my state to get the house on the market. Then a few months for the bank to lower the price. Now with the new 60 day delay rule it should be even slower to move places. This downturn is maybe a 1/4 of the way over.

  8. Steve Barry commented on Aug 14

    1. Print Shiller’s housing chart.

    2. Take a black sharpie and make the index peak at 215 in 2006 and then do a sharp reversal to 170 today (I adjusted the top for inflation).

    3. Every month Barry will post links to Shiller’s data and we will use the 20 city composite number to update.

    4. DON’T MENTION A FUCKING HOUSING BOTTOM TILL THE INDEX IS BELOW 100.

  9. TruthTeller commented on Aug 14

    Touche, Sailorman! Wow! Look at the correlation between “Blue” states and states that have the highest level of foreclosure activity.

    Does this mean that Democrat voters are generally fiscally irresponsible?

  10. matx commented on Aug 14

    Does any figure look at whether the properties are primary residences or vacation homes or investment properties? My in-laws have a home in Ft. Myers and just a few years ago, many people they knew were literally lining up to buy into new communities that were still on the drawing board for investment purposes. I would imagine many of these foreclosures in the Ft. Myers area are 2nd or even 3rd homes. Hopefully, this will make housing affordable for working class families who could no longer buy a home in the area.

  11. john commented on Aug 14

    i know that the bearish negative tone of this article is written to, and attracts like minded commentators. hi. here’s where the holes are…

    let’s assume that at some point either now or in the future or in the recent past, at SOME POINT the housing market will ‘turn’.

    When that happens, what will the data ‘look’ like. When that happens and you look back over the previous months and quarters, what will that look like.

    Ohh, i’ve already lost you.

    Month to month matters. when trying to predict a reversal or at least IDENTIFY it, you have to use month to month, because by the time a whole dozen month to months have collected, you’re still waiting for the year over year data.

    ok? just pretend for a minute.

    alright, so the other element here, in today’s article is that ‘foreclosure activity’ etc etc… but, you have to differentiate between the types.

    let’s say Jim and Mary Smith bought (or refinanced) a house in the final days of the credit window being open. It was too much for them and they began missing payments last year.

    Now, let’s say that Frank and Tina Jones did the same but just missed their first payment last month.

    The Smith’s house is going to auction or to REO and will add to
    the inventory soon and then be done.

    The Jones’s house won’t hit the market until next year (unless the bank does a short sale before then)

    Different timelines. completely different. the credit window closed last year at this time, actually about 13 months ago. before that, indymac was offering and closing deals on alt-a paper and very few others were…

    so it would stand to reason that defaults and foreclosures would be huge y-o-y as of all the months leading up to last month. DUHH.

    I know, it’s not on purpose… but come on, doesn’t anything or anyone challenge your train of thought? let it, instead of letting your anger guide you.

    -][

  12. GaryK commented on Aug 14

    Hey that data is much better than I expected. This must be the bottom. I think I will tell everyone to buy Homebuilders and Banks today. Back up the truck!

    Dennis Kneale, CNBC Visionary*

    *Not really

  13. leftback commented on Aug 14

    john – your train of thought is apparently travelling in the wrong direction and headed for a collision with reality !!

    generally speaking this is a data-driven and fairly analytical forum – i don’t see much anger here – except for a few people who are long RE and leveraged, perhaps?

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a9O8KyVuqSTg&refer=home

    Barry – check this out, it is looking more and more as though some important people are sitting on high end real estate and becoming VERY concerned about an imminent RE meltdown in their back yard so they are changing the rules to “help folks obtain mortgages…”

    All this stuff will just make things worse and bring about the end of Fannie and Freddie even earlier….

  14. J commented on Aug 14

    Hey all,

    I am new to real estate investment and was confused by the legend on the chart. It seems to me that the households per property with FC activity is higher in PA than in Cali or Florida, but BR said that “California, Florida, Ohio reported the highest foreclosure totals (#).”

    Could someone please tell me why PA isn’t on that list?

    Thanks,
    J

  15. flenerman commented on Aug 15

    According to zillow.com our home has dropped 38% in value from it’s peak but bottoming…? I don’t think so. Here are some recent figures from realtytrac.com for our little part of the world (zip code 94533):
    Bank Owned:
    6/13/08 674
    7/12/08 639
    8/14/08 1,126
    Fortunately, my wife and I are blessed. We’ll be making house payments until we leave this world but we expect to be able to do so. Paper gains and paper losses. We know that you can’t take it with you anyway. If I find out THAT’s a lie, I’m really going to be pissed.

Read this next.

Posted Under