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Q3 Foreclosure Activity Increases 5% in Q3, Highest Ever Recorded By RealtyTrac
No matter how you slice or dice it, the housing market is bad and keeps on being bad. As reported today by RealtyTrac, foreclosure activity in the third quarter saw "one in every 136 U.S. housing units received a foreclosure filing during the quarter: the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005." "Housing rebound" - meet facts.
RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for Q3 2009, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008. One in every 136 U.S. housing units received a foreclosure filing during the quarter — the highest quarterly foreclosure rate since RealtyTrac began issuing its report in the first quarter of 2005.
Foreclosure filings were reported on 343,638 properties in September, a 4 percent decrease from the previous month but a 29 percent increase from September 2008. Despite the monthly decrease, September’s total was still the third highest monthly total since the RealtyTrac report began in January 2005, behind only July and August of this year.
“Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac. “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties.”
If indeed the limitation on REO activity is coming to an end, look for foreclosed inventory to start hitting the market in earnest, thus keeping the onus on the Fed to preserve mortgage rates as low as possible (read a QE extension is virtually guaranteed) as every sub 5% new and refi loan will be milked to the maximum by all those who believe it is their sworn duty to reflate the housing bubble.
As for where the pain continues to be greatest: no surprise as the usual suspects rear their post-last bubble head: California, Florida, Arizona, Nevada, Illinois and Michigan.
California, Florida, Arizona, Nevada, Illinois and Michigan accounted for 62 percent of the nation’s total foreclosure activity in the third quarter, with 579,541 properties receiving foreclosure filings in the six states combined.
With 250,054 properties receiving foreclosure filings during the quarter, California accounted for nearly 27 percent of the nation’s total. The state’s foreclosure activity decreased nearly 2 percent from the previous quarter thanks to a 10 percent drop in default notices, but scheduled auctions increased 4 percent from the previous quarter and REOs increased 12 percent from the previous quarter.
Florida foreclosure activity decreased less than 1 percent from the previous quarter, but the state still posted the second highest foreclosure activity total for the third quarter. Foreclosure filings were reported on 156,924 Florida properties, a 23 percent increase from Q3 2008. Default notices in Florida decreased 6 percent from the previous quarter while scheduled auctions increased 5 percent from the previous quarter and REOs increased 16 percent from the previous quarter.
Arizona posted the nation’s third highest foreclosure activity total in the third quarter, with 50,342 properties receiving a foreclosure filing during the quarter — a 5 percent increase from the previous quarter and a 25 percent increase from Q3 2008.
Nevada posted the nation’s fourth highest foreclosure activity total, with 47,925 properties receiving a foreclosure filing in the third quarter, followed by Illinois, with 37,270 properties receiving a foreclosure filing, and Michigan, with 37,026 properties receiving a foreclosure filing. All three states reported increasing foreclosure activity from the previous quarter and from Q3 2008.
Other states with foreclosure activity totals among the nation’s 10 highest were Georgia (33,385), Texas (29,838), Ohio (29,645), and New Jersey (18,108).
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Just in time....Acorn goes off probation on 10/31 from government funding. Funding will resume for their housing bank loans to poor people via organizing demonstrations outside of lending institutions.
Increase the FHA's 22.9% foreclosure/default rate? Yes We Can!
An interesting note in the Lex column at the FT today.
Simply halting the rise in unemployment seems unlikely to produce more activity. With a similar sized workforce of 135m people back in the year 2000 there were 5.2m existing home sales. On a seasonally adjusted basis, transactions hit that rate in July, and were running at a 5.1m annual pace in August, according to the National Association of Realtors. From an all-time peak of 69 per cent in 2005 (when 7.1m homes were sold), rates of owner occupation are almost back to the 67 per cent typical a decade ago. Assuming no return to the mania of the boom, job formation is needed to spur demand.
The interesting questions going forward are if there is stability in the residential space at 67%. Personally I rather doubt it and suspect we will be well on our way to looking 65% square in the face as we enter the selling season next spring. Especially since the post war average is around the 65% mark with the 67% a decade ago reflecting the efforts by the federal government to boost homeownership before the bubble really hit. Beyond 65% the issue will be if the sustained rates of unemployment, especially in the all important under 27 age group will have a long term impact on the household formation rate and entry into homeownership rates.
Cheers
In addition to those points, in 1999, mortgage debt was $4.5 trillion, now it's $10.5 trillion. In '99, personal debt was $1.5 trillion, now it's $2.5 trillion for the same level of employment. And did I mention that wages have barely kept up with reported inflation?
Also, post-war average housing is closer to 60% than 65%, unless you are referring to the first Gulf War.
Employment being in absolute total numbers of approximately 130 and not as a percentage of the total available workforce? Which I think plays directly into formation. I believe that the idea on wages and reported inflation is very sad. Especially when combined with the total carrying capacity in therms of leverage of the system. Hence the drive against the tide to pump carrying capacity over 'real" capacity.
Got a link on the 60? I would love to check it out and learn. I am attempting to find my source on the 65... Regardless, I believe that we will easily end up closer to 60 than 65.
Miles - I can't remember where I saw it. I think it's from a friend who did the research. As I recall, it was around 60% in the mid-80's, 63% around late 70's, and under 60% prior to 1970. The worst part is that I've seen the chart in the last month and didn't save it.
i think ben's numbers are in the ball park...i just read a piece about this going back to the onset of the housing matter vis a vis the CRA act signed by Clinton.....
as for Miles' mention of that 27 ish category, I would simply add to the equation that those will college educations have some serious student loan mortgages to contend with!!!! i know of people with 50-100k in student loan debt. how the hell do you think about a home mortgage with that debt load?
(snarky answer is to go to the new mortgage brokers (not banks) BAC, WFC, JPM, C who write the loan, collect fees, and dump the crap on what is quickly becoming the worlds residential mortgage paper sewage repository, the FHA, due to implode any minute but will be held off on until post 2010 congressional midterms. phew.)
You guys are always looking at the cup half-empty. Look on the bright side, most houses aren't in foreclosure. XHB $45 by December on 2,306 shares a day volume.
yeah; to bad it doesnt work like that ...
Huh, are you serious?
How did you complete the CAPTCHA?
Let us know how the house flipping turns out for you.
You sir,
are on crack.
PS Not the good kind.
All but a couple outliers and DC huh, wonder what's propping up home values there? How far off can the public v. private civil war be?
Remember for most, the public is private for them just as real estate, construction, autos or banking is "private".
And we only have three more years of recasts to go !!
Time to start marking the days off on my short-timer calendar.
i am a realtor(who is against 8k tax credit) i go to sheriff foreclosure auction every month. ususally about 400 homes for auction. last 7 months every major big bank pulls the homes from the blocks the morning of the sale half of them vacant. guess there not ready to have write downs yet.