Foreclosures recede as housing rebounds
A 35 percent drop in completed foreclosures in August may be encouraging, as 'shadow inventory' hits lowest level in 5 years.
By Conor Dougherty, The Wall Street Journal
The number of foreclosed homes continues to fall across the country, which is helping the U.S. housing market creep back to normal.
There were some 48,000 foreclosures completed in August, down 35 percent from a year ago, according to a release by CoreLogic. At the same time, the inventory of homes that aren’t for sale but are either in foreclosure or in severe financial distress — called the “shadow inventory” because the homes are likely to be listed for sale — is at 1.9 million, down by 22 percent from a year ago and the lowest level since August 2008.
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The decline in foreclosures and shadow inventory is helping the housing market return to a more normal state in which homes are by and large sold by one homeowner to another with the help of a mortgage. In the past year, the market has been skewed by investors buying homes with cash, typically from banks or at courthouse auctions.
Of course, even a normal market has some number of foreclosures, and there was an average of about 21,000 completed foreclosures a month from 2000 to 2006, roughly half as many as in August. Foreclosures are improving fast, but they are still higher than normal.
“We’re only in the fifth inning,” said Sam Khater, deputy chief economist at CoreLogic.
CoreLogic’s report was just the latest housing-market barometer to ask the question “Are we getting back to normal yet?” The answer, according to real estate listings site Trulia, is that we’re getting close but aren’t there yet.
A typical real estate market, Trulia says, is one that features neither the highs of the bubble years nor the lows of the recession and real estate bust. In numerical terms, that means a delinquency and foreclosure rate of 5.25 percent, as defined by Lender Processing Services, 1.5 million housing starts a year and 5.5 million existing homes sold.
By that rationale, the housing market is about two-thirds back to normal. Home sales are pretty much back, rising to 5.48 million in August, up 13% from a year ago, while delinquency, at 8.66 percent in August, is about 60 percent normal.
The big laggard is construction: August home starts were running at an 891,000 seasonally adjusted annual rate, about 40 percent of normal.
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I have a friend who is a real estate appraiser who told me that there are untold numbers of people living in homes that will be foreclosed upon in the future... Some, having lived in those homes for years while not making payments on them. That information is not available to MSN writers, or anyone in the general public. Only Foreclosures are known to the General Public. Not the payment history of delinquent home owners.
Knowing that, I would say this article is wrong, and just looking at known trends. Have you ever noticed how there are never very many bank owned properties in the market at once? Banks do that to intentionally control the market.
I notice that one thing never mentioned is the fact that for as long as the market has been on it's downward spiral and the banks have been forclosing that the number of people in financial trouble has greatly declined. that said, who's left to forclose on ?
Foreclosures down by 35%? are you kidding me? Here are some facts folks, you decide:
1. Top 5 Banks control the foreclosure in the USA. Their goal is to take care of their investors.
2. Instead of helping you, they make it impossible for you to stay in your home.
3. So if your in that 35% bracket that survived a foreclosure during the last 12 months, that means
your day is getting closer, because they probably told you that due to 1. credit worthiness
2. Judgment from a collection agency. 3. Under water in debt. 4. Poor credit scores. 5. or make
up an excuse to say "you are no longer qualified for modification as per the guidelines"
4. Or they will go back to the original note, over and over and tell you that you agreed to pay the
note, if nothing applies.
5. Ruin the housing market for home owners, by destroying home equity in trillions of dollars!!
6. Create opportunity for (rich) home buyers to buy them cheap after a foreclosure.
7. Rich will borrow money from the rich banks to invest i.e. the banks are happy to lend them!!!
8. Cycle will continue. It is an evil process.
But they'll say " you signed the terms and conditions of the loan, am I correct ?!?#?