Mixed news emerges on foreclosures
November had the fewest foreclosure starts in nearly six years, but completed foreclosures reached a 9-month high.
Completed foreclosures reached their highest level in nine months in November, while foreclosure starts were at their lowest level in almost six years.
Confused? The mixed picture on foreclosures reflects a number of factors, including the fact that lenders are engaging in more foreclosure alternatives, such as mortgage modifications and short sales. The statistics, compiled by RealtyTrac, also reflect the differing pace of foreclosures in judicial and nonjudicial foreclosure states.
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"The drop in overall foreclosure activity in November was caused largely by a 71-month low in foreclosure starts for the month, more evidence that we are past the worst of the foreclosure problem brought about by the housing bubble bursting six years ago," Daren Blomquist, vice president at RealtyTrac, said in a news release. "But foreclosures are continuing to hobble the U.S. housing market as lenders finally seize properties that started the process a year or two ago — and much longer in some cases. We're likely not completely out of the woods when it comes to foreclosure starts, either … ."
According to RealtyTrac, foreclosure starts in November were down 13% from the previous month and 28% from a year ago.
But bank repossessions, or completed foreclosures, were up 11% over October and up 5% from a year ago.
The foreclosure picture was mixed geographically, too. A total of 23 states plus the District of Columbia showed higher foreclosure activity than at the same time last year. But the national statistics were driven by big year-over-year declines in California, Georgia, Michigan, Texas and Arizona.
Foreclosure starts were down from a year ago in 28 states, including Oregon (84%), Pennsylvania (67%), California (63%), Arizona (59%) and Georgia (51%).
But foreclosure starts rose in 18 states, some exponentially, with increases of 538% in New Jersey, 455% in Arkansas, 209% in New York 97% in Washington and 95% in Connecticut.
The largest numbers of foreclosures were in Florida and California, and the 10 cities with the highest rate of foreclosure activity were all in those two states.
The foreclosure rate in November was highest in Florida, at a rate of one foreclosure filing for every 304 housing units, compared with a national average of one in 728. The other states with the highest foreclosure rates were Nevada (one in 390), Illinois (one in 392), California (one in 430) and South Carolina (one in 455).
"This all leads to confusion over whether the market is getting better or worse," Blomquist wrote at RealtyTrac. "Generally I would argue it's getting better, but the unintended consequence of all the foreclosure prevention efforts of the last few years is a hidden inventory of properties in foreclosure limbo. The jump in bank repossessions in November is evidence that these properties are there and that some of them are being foreclosed. What's unknown is how many will end up as foreclosures in 2013 and even beyond."
If you register (it's free), you can dig down into statistics on the state and county level here.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.