Third-party investors are reselling foreclosure properties theyâ€™ve scooped up at auction at a rapid pace in states along the countryâ€™s Western seaboard. In fact, theyâ€™re moving distressed homes faster than lenders, according to a local tracking firm.
ForeclosureRadar, based out of Discovery Bay, California, keeps tabs on every foreclosure and provides daily auction updates for its coverage area, which encompasses Arizona, California, Nevada, Oregon, and Washington.
The company says the one consistent market statistic in all five states during the month of May was a drop in how long itâ€™s taking foreclosure auction investors to offload properties.
â€œWhile we believe this is partially due to finally seeing some spring selling activity, we think it has more to do with an overall lack of quality, affordable homes for sale,â€ said Sean Oâ€™Toole,CEOÂ of ForeclosureRadar.
Based on the firmâ€™s market data, the average number of days between an investorâ€™s purchase of the property at foreclosure auction inÂ Arizona, and when the property was resold, was 95 days in May. Thatâ€™s a drop of more than 10 percent from the month before, and contrasts with the average resell timeline of 150 days for banks.
InÂ California, investors are offloading foreclosed homes in 134 days on average, versus 227 for banks.
In the foreclosure hotbed ofÂ Nevada, itâ€™s taking investors an average of 102 days to resell homes, while banks are holding onto a property for 177 days before it sells.
InÂ Oregon, time-to-resell is 122 days for foreclosure investors, compared to 208 days for banks.
WashingtonÂ saw a similar divergence, though its investor timeline was the longest of all five states. There, investors are able to turn around and sell foreclosure properties in 164 days on average, versus 212 days for banks.
Looking at ForeclosureRadarâ€™s historical data, the resell timelines for investors and banks were separated by fewer than 8 days as recently as February in Washington and Oregon, and fewer than 20 days in Nevada as recently as January.
According to Oâ€™Toole, investors have become better at turning a foreclosure into a marketable property that attracts buyer interest. He also points to the fact that delays in the foreclosure process from recent robo-signing reviews and moratoriums have left fewer affordable homes available for sale.
â€œForeclosure investors may be the only winner so far,â€ Oâ€™Toole said, â€œbenefitting by being able to resell homes purchased at foreclosure auction a little more quickly.â€
Overall foreclosure filing activity along the West Coast was down in May, according to ForeclosureRadar.
The company tracked fewer filings in all states except California, where there was an increase in notices of trustee sale and likely signals more foreclosure sales in the state in the months ahead.
Activity on the courthouse steps was mixed, with California the only state to have increases in foreclosure sales both back to the bank and sold to third-party investors.
After recording a jump in foreclosure cancellations across the board in April, ForeclosureRadar says there was a reversal of this trend in May. Cancellations dropped significantly last month in California, Nevada, and Washington. They declined moderately declined in Arizona, and increased in Oregon.
Time-to-foreclose set a record in California last month, taking an average of 344 days. However the length of the foreclosure process declined in Nevada, Oregon, and Washington, and was up just two days in Arizona.