RealtyTrac warns distressed-property 'dam ... will eventually burst'
Foreclosure filings hit their lowest level in more than four years in the first quarter, according to a report from foreclosure data aggregator RealtyTrac.
notices, scheduled auctions, and bank repossessions were filed on
572,928 properties in the first quarter, or one in every 230 U.S.
housing units -- the lowest number of filings since fourth-quarter 2007,
when 527,740 properties received filings.
foreclosure activity was down 2 percent from the fourth quarter and 16
percent from first-quarter 2011. March accounted for nearly 38 percent
of the quarter's foreclosure activity, with 198,853 properties receiving
filings. That was the lowest monthly total and the first under 200,000
since July 2007, the report said.
On an annual basis, foreclosure activity fell 17 percent in March.
"The low foreclosure numbers in the first quarter are not an indication
that the massive reservoir of distressed properties built up over the
past few years has somehow miraculously evaporated," said Brandon Moore,
RealtyTrac's CEO, in a statement.
"There are hairline cracks
in the dam, evident in the sizable foreclosure activity increases in
judicial foreclosure states over the past several months, along with an
increase in foreclosure starts in many judicial and nonjudicial states
"The dam may not burst in the next 30 to 45 days, but it
will eventually burst, and everyone downstream should be prepared for
that to happen -- both in terms of new foreclosure activity and new
States that use the nonjudicial foreclosure
process lead the nationwide decline in foreclosure activity, RealtyTrac
said. Those 24 states and Washington, D.C., saw foreclosure activity
drop 8 percent from the fourth quarter and 28 percent from first-quarter
Several nonjudicial states saw significant year-over-year
drops in activity in the first quarter: Arkansas (79 percent), Nevada
(62 percent), Washington (55 percent), Arizona (41 percent), Texas (31
percent), and California (21 percent).
By contrast, foreclosure
activity rose 8 percent quarter to quarter and 10 percent year over year
in the 26 states that mainly use the judicial foreclosure process.
states that posted some of the biggest annual increases include Indiana
(45 percent), Connecticut (38 percent), Massachussetts (26 percent),
Florida (26 percent), South Carolina (26 percent), Pennsylvania (23
Foreclosure starts, which include default notices or scheduled auctions
depending on the state, rose for the third straight month in March, up 7
percent from February, though still down 11 percent year over year.
starts increased on a monthly basis in 31 states, with the biggest
jumps in Nevada (153 percent), Utah (103 percent), New Jersey (73
percent), Maryland (53 percent), and North Carolina (47 percent).
posted the nation's highest foreclosure activity rate last quarter,
with one in 95 units receiving a filing -- a 62 percent year-over-year
California had the second-highest foreclosure activity rate (1 in 103 units), followed by Arizona (1 in 106 units).
Top 10 states with the highest foreclosure rates
|Area ||Foreclosure rate (Q1 2012) |
|U.S. ||1 in 230 housing units |
|NevadaÂ ||1 in 95 |
|California ||1 in 103 |
|Arizona ||1 in 106 |
|Georgia ||1 in 119 |
|Florida ||1 in 123 |
|Illinois ||1 in 141 |
|Michigan ||1 in 162 |
|Colorado ||1 in 191 |
|Utah ||1 in 198 |
|Wisconsin ||1 in 206 |
metro areas accounted for 12 of the 20 metros with the highest
foreclosure rates in the nationa in the first quarter, including eight
of the top 10.
20 U.S. metros with the highest foreclosure rates
|Metro area ||Foreclosure rate (Q1 2012) |
|Stockton, Calif. ||1 in 60 housing units |
|Modesto, Calif. ||1 in 60 |
|Riverside-San Bernardino-Ontario, Calif. ||1 in 62 |
|Vallejo-Fairfield, Calif. ||1 in 63 |
|Merced, Calif. ||1 in 72 |
|Sacramento--Arden-Arcade--Roseville, Calif. ||1 in 77 |
|Bakersfield, Calif. ||1 in 81 |
|Las Vegas-Paradise, Nev. ||1 in 82 |
|Phoenix-Mesa-Scottsdale, Ariz. ||1 in 87 |
|Visalia-Porterville, Calif. ||1 in 89 |
|Atlanta-Sandy Springs-Marietta, Ga. ||1 in 90 |
|Fresno, Calif. ||1 in 92 |
|Miami-Fort Lauderdale-Pompano Beach, Fla. ||1 in 95 |
|Oxnard-Thousand Oaks-Ventura, Calif. ||1 in 97 |
|Orlando-Kissimmee, Fla. ||1 in 101 |
|Rockford, Ill. ||1 in 104 |
|Chicago-Naperville-Joliet, Ill.-Ind.-Wis.Â ||1 in 107 |
|Chico, Calif. ||1 in 111 |
|Prescott, Ariz. ||1 in 113 |
|Santa Rosa-Petaluma, Calif. ||1 in 113 |
start to finish, the foreclosure process took an average of 370 days to
complete nationwide, up from 348 days in the fourth quarter -- the
highest average in the past five years, according to RealtyTrac.
key states are seeing foreclosure timelines decrease, however. In
California, the average was 320 days, down from 352 days in the fourth
Colorado, Utah, Massachusetts, Nevada, Michigan and Maryland also saw declines.Â
five states with the longest foreclosure timelines were New York (1,056
days), New Jersey (966 days), Florida (861 days), Illinois (628 days),
and Maryland (618 days).Â