Foreclosures Decline

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Completed foreclosures decline in July

CoreLogic’s National Foreclosure Report for July shows there were 58,000 completed foreclosures in the U.S. in July 2012, down from 69,000 in July 2011 and 62,000 in June 2012. Since the financial crisis began in September 2008, there have been approximately 3.8 million completed foreclosures across the country. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure.

Approximately 1.3 million homes, or 3.2 percent of all homes with a mortgage, were in the national foreclosure inventory as of July 2012 compared with 1.5 million, or 3.5 percent, in July 2011. Month-over-month, the national foreclosure inventory was unchanged from June 2012 to July 2012. The foreclosure inventory is the share of all mortgaged homes in any stage of the foreclosure process.

“Completed foreclosures were down again in July, this time by 16 percent versus a year ago, as servicers increasingly rely on alternatives to the foreclosure process, such as short sales and modifications,” said Mark Fleming, chief economist for CoreLogic. “Completed foreclosures remain concentrated in five states, California, Florida, Michigan, Texas and Georgia, accounting for 48 percent of all completed foreclosures nationwide in July.”

Highlights as of July 2012:

  • The five states with the highest number of completed foreclosures for the 12 months ending in July 2012 were: California, 118,000; Florida, 92,000; Michigan, 61,000; Texas, 57,000; and Georgia, 54,000. These five states account for 48.1 percent of all completed foreclosures nationally.
  • The five states with the lowest number of completed foreclosures for the 12 months ending in July 2012 were: South Dakota, 32; District of Columbia, 120; Hawaii, 445; North Dakota, 575; and Maine, 608.

Pre-foreclosure, REO sales decline in second quarter

Sales of homes that were in some stage of foreclosure or bank-owned (REO) accounted for 23 percent of all U.S. residential sales during the second quarter — up from 22 percent of all sales in the first quarter and up from 19 percent of all sales in the second quarter of 2011, according to RealtyTrac’s Q2 2012 U.S. Foreclosure Sales Report.

Although foreclosure-related sales as a percentage of total sales increased, the raw number of foreclosure-related sales in the second quarter (224,429) decreased 12 percent from the previous quarter and was down 22 percent from the second quarter of 2011 — the first annual decrease in foreclosure-related sales after five quarters of increases.

The average foreclosure-related sales price in the second quarter ($170,040) increased 6 percent from the previous quarter and was up 7 percent from the second quarter of 2011 — the first annual increase in average price since Q2 2010 and the biggest annual increase since Q4 2006.

Homes in foreclosure or bank-owned sold at an average price that was 32 percent lower than the average price of a non-foreclosure home, up from a 30 percent discount in the first quarter and also a 30 percent discount in the second quarter of 2011.

Short Sale Soundoff: Gap between REOs, short sales shrinks in Q2

The gap between bank-owned (REO) sales and short sales continued to shrink in the second quarter, with bank-owned sales outnumbering short sales by 9,833, the smallest difference since the third quarter of 2007, RealtyTrac recently reported. Short sales outnumbered bank-owned sales in 13 states and the District of Columbia.

RealtyTrac analyzed nationwide short sale transactions occurring on properties not yet in the foreclosure process and found that those increased 18 percent on a year-over-year basis for the period of January through May. These non-foreclosure short sales accounted for 14 percent of all sales during this time period, a bigger percentage than either pre-foreclosure sales or bank-owned sales.

“The second quarter sales numbers provide solid statistical evidence of what we’ve been hearing anecdotally from real estate agents, buyers and investors over the past few months: there is a limited supply of available foreclosure inventory to choose from in many markets,” said Daren Blomquist, RealtyTrac vice president. “Given this shortage of supply and the seasonally strong buyer demand in the second quarter, it’s no surprise that the average foreclosure-related sales price increased both on a quarterly and annual basis.

Pending home sales rose in July to the highest level in more than two years and remain well above year-ago levels, according to the NATIONAL ASSOCIATION OF REALTORS®.

Pending home sales rebound in July

The Pending Home Sales Index (PHSI) rose 2.4 percent to 101.7 in July from 99.3 in June and is 12.4 percent above July 2011, when it was 90.5. The data reflect contracts but not closings.

Lawrence Yun, NAR chief economist, said the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. “While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity,” Yun said.

Limited inventory is constraining market activity. “All regions saw monthly increases in home-buying activity except for the West, which is now experiencing an acute inventory shortage,” Yun added.

The PHSI in the West slipped 1.7 percent in July to 109.9, but is 1.3 percent higher than July 2011.

Survey shows buyers still stymied by lack of choice

A survey of nearly 1,000 potential home buyers conducted by Redfin across 19 metropolitan markets in the U.S. found that 46 percent of buyers believe now is a good time to buy, a decrease from the previous two quarters.  The survey also found that 32 percent of homeowners believe now is a good time to sell.

Other highlights from the survey include:

  • Sixty-one percent of respondents believe prices will increase, up two quarters in a row
  • Sixty-two percent said they are “very interested” in conventional sales, up from 57 percent in the second quarter and 48 percent in the first quarter
  • Thirty-one percent would step back from competing against other buyers for a home, compared with 28 percent in the second quarter
  • Twenty-seven percent of respondents cited general economic weakness as a concern about buying this year, up from 24 percent in the second quarter and 20 percent in the first quarter.

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