As banks begin to lift the moratorium on foreclosure, the number of Real Estate Owned (REOs) or foreclosed properties has begun to rise significantly. According to Realty Trac ®, March produced the highest number of foreclosure filings ever recorded!
RealtyTrac® reported that March had a 17% increase over January and a 46% increase over March 2008. As a result, first quarter 2009 foreclosure filings, which include default notices, auction sale notices, and bank repossessions, was up substantially - 24% over first quarter 2008 and 9% over fourth quarter 2008.
The hardest hit areas continue to be Nevada, Arizona, California, Illinois, and Florida. These five states combined have over half of the total foreclosures – 60% - based on the data supplied by RealtyTrac®. The large proportion of foreclosures in these states is no surprise considering the unprecedented inflated house prices and the number of investors that were buying in these areas during the boom years. Averaged nationally, 1 in 159 homes received a foreclosure filing notice the first part of this year.
Of the top five cities with homes in foreclosures on RealtyTrac®’s website, three of them are in California. The top five foreclosure cities are:
1. Las Vegas, Nevada leads the nation in foreclosures with 1 in every 22 homes
2. Merced, California has 1 in every 24 homes
3. Cape Coral, Florida has 1 out of every 26 homes in foreclosure
4. Stockton, California is 1 in 27
5. Riverside, California rounds out the top five with 1 in 28 in foreclosure.
In an otherwise gloomy forecast, RealtyTrac® also reported that Denver, Colorado and Dayton, Ohio both showed a decrease in foreclosure activity. Denver’s foreclosures were down a whopping 46% while Dayton’s foreclosures were down 15.7% over the same period of 2008.
As more banks release their foreclosed properties to the market, house prices will continue to drop. The three buying segments that will continue to benefit the most from the price declines are:
• First time home buyers,
• Investors, and
• Soon to retire baby boomers.
First time home buyers can finally afford to buy a home; investors are finding foreclosed properties that have positive cash flow, and baby boomers are looking for great deals on their retirement homes. Although buyers are still very cautious and are typically looking 8 – 12 months in advance rather than the 3 – 6 months that is average.
While the foreclosure numbers from RealtyTrac® are frightening, they are important to the long term health of our real estate market. Too many people are in homes that they cannot afford, have not been able to make the payments on and that are worth less than what they owe. The banks cannot continue to hold them as non-performing assets. The sooner the foreclosed homes are on the market and sold, the sooner our recovery begins. So this newest wave of foreclosures is one of the first steps toward that recovery.
Written by Andee Allen. She is freelance writer, Strategic Media Coach/Consultant, Real Estate Investor, and California Realtor (License #01854926). You are welcome to contact Andee at andeeallen@gmail.com or on her website at www.strategicmediacoach.com.
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