Impact on the housing market
Properties that enter foreclosure still take some time to complete the process, however. In the second quarter, foreclosures took an average of 378 days — the longest time since 2007 — to move from the initial notice to the completed foreclosure, up from 370 days in the first quarter. (Bing: Get help avoiding foreclosure)
In several judicial-foreclosure states with the biggest backlog of foreclosures, such as New York and New Jersey, the time to completion actually decreased slightly.
Once banks took back a property, it took an average of 195 days from the date of foreclosure to sell, RealtyTrac said, up from 178 days in the first quarter. Properties with delinquent loans that sold before the foreclosure was complete — namely, short sales — took an average of 319 days to sell from the time of the first notice, up from 306 days in the first quarter.
Zandi said he expects another wave of distressed properties to hit the market by the fourth quarter, when the market is typically slow. This distressed inventory will dampen prices, though not by much, he said, given the investor demand for these homes and the large number of expected short sales, which typically sell for more than real-estate-owned properties.
"I expect home prices to fall 1% this year and rise 1% next year," Zandi said. "We are not home free [with the recovery] yet."
Blomquist and others said it's a healthy thing for these distressed properties, which have hung over the housing market, to be added to the available inventory now, especially given the short supply in many areas.
Kim Drusch, a real-estate agent with Century 21 Award in San Diego, said she agrees. With just two months' supply of available houses listed in her area, she's seeing multiple offers for any decent property that pops up.
"We need that inventory now," Drusch said. "The REOs are not coming out, and people have nothing to purchase. We've got multiple offers on everything. I've never seen a frenzy like this."
Q2 2012 foreclosures by state
| Rank | State | Total | 1/every # of households | % change from Q1 2012 | % change from Q2 2011 |
| U.S. | 558,310 | 236 | -2.55 | -8.21 | |
| 1 | Arizona | 25,980 | 109 | -3.62 | -34.08 |
| 2 | Nevada | 10,397 | 113 | -15.79 | -64.28 |
| 3 | California | 118,437 | 116 | -11.11 | -18.89 |
| 4 | Georgia | 35,129 | 116 | 2.61 | 26.78 |
| 5 | Florida | 70,349 | 128 | -4.08 | 18.68 |
| 6 | Illinois | 40,680 | 130 | 8.02 | 34.88 |
| 7 | Michigan | 24,468 | 185 | -12.41 | -27.37 |
| 8 | Ohio | 27,560 | 186 | 15.9 | 20.69 |
| 9 | Wisconsin | 12,664 | 207 | -0.5 | 9.51 |
| 10 | Colorado | 10,597 | 209 | -8.4 | -17.26 |
| 11 | Utah | 4,623 | 212 | -6.57 | -42.41 |
| 12 | South Carolina | 9,949 | 215 | -3.65 | 18.94 |
| 13 | Indiana | 10,748 | 260 | -11.68 | 17.89 |
| 14 | New Hampshire | 2,126 | 289 | -6.38 | 4.11 |
| 15 | Idaho | 2,147 | 311 | -10.58 | -52.29 |
| 16 | Minnesota | 7,313 | 321 | -2.88 | -10.98 |
| 17 | Oregon | 5,167 | 324 | 3.78 | -35.4 |
| 18 | Massachusetts | 7,851 | 358 | 24.44 | 10.42 |
| 19 | Delaware | 1,106 | 367 | -42 | -34.48 |
| 20 | Iowa | 3,532 | 378 | -18.64 | -16.72 |
| 21 | Texas | 26,302 | 379 | 10.48 | 7.5 |
| 22 | Tennessee | 7,376 | 381 | -4.91 | -5.29 |
| 23 | Missouri | 6,928 | 392 | 1.69 | -0.16 |
| 24 | Kansas | 2,920 | 422 | 9.08 | 23.47 |
| 25 | Connecticut | 3,487 | 427 | 1.93 | 6.73 |
| 26 | Louisiana | 4,598 | 427 | 1.01 | -18.27 |
| 27 | New Mexico | 2,076 | 434 | -17.98 | 7.62 |
| 28 | Rhode Island | 1,064 | 436 | 3.8 | -43.01 |
| 29 | Washington | 6,484 | 445 | 12.37 | -45.24 |
| 30 | Pennsylvania | 12,422 | 448 | -2.54 | 25.34 |
| 31 | Virginia | 7,489 | 449 | -7.99 | -30.83 |
| 32 | Alabama | 4,813 | 451 | 6.15 | 5.25 |
| 33 | North Carolina | 9,564 | 452 | 10.35 | 19.33 |
| 34 | Oklahoma | 3,590 | 464 | -5.13 | -28.83 |
| 35 | Alaska | 581 | 528 | 53.7 | -0.17 |
| 36 | Maryland | 4,347 | 547 | 3.97 | -3.55 |
| 37 | Kentucky | 3,033 | 635 | -3.68 | 14.54 |
| 38 | New Jersey | 5,455 | 651 | -1.32 | 65.91 |
| 39 | Nebraska | 1,205 | 661 | -11.72 | 51.57 |
| 40 | Hawaii | 711 | 731 | -57.37 | -66.6 |
| 41 | Wyoming | 283 | 925 | 2.91 | 8.85 |
| 42 | New York | 8,686 | 933 | 58.1 | 20.92 |
| 43 | Arkansas | 1,365 | 964 | 23.31 | -73.39 |
| 44 | Mississippi | 1,157 | 1,102 | 18.79 | 37.74 |
| 45 | Montana | 432 | 1,118 | -0.23 | -43.16 |
| 46 | South Dakota | 274 | 1,326 | -7.12 | -1.44 |
| 47 | Maine | 316 | 2,284 | -12.95 | -65.31 |
| 48 | West Virginia | 359 | 2,457 | -7.47 | -4.27 |
| 49 | Vermont | 101 | 3,193 | 68.33* | 405* |
| 50 | North Dakota | 34 | 9,338 | 13.33 | -63.83 |
| District of Columbia | 35 | 8,478 | -14.63 | -58.82 |
*Actual increase may not be as high because of data-collection changes or improvements; chart data by RealtyTrac
