Gary's Blog

Friday, November 13, 2009

3rd drop in foreclosures hints at recovery

3rd drop in foreclosures hints at recovery; state-by-state chart
By Paul Wiseman, USA TODAY

Foreclosures fell for the third-consecutive month in October, another sign the worst of the housing crisis may be past.
RealtyTrac, an Irvine, Calif., real estate firm, reports Thursday that foreclosure filings totaled 332,292 last month, down 3% from September but up 19% from a year earlier. The figure means that one of every 385 homes received a foreclosure notice in October.
"It looks like it's leveling out," says Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, N.J. "We're not seeing further deterioration in the housing market."
RealtyTrac CEO James Saccacio said that the third-straight monthly drop was unprecedented and perhaps a sign "that the foreclosure tide may be turning" but warned that "the fundamental forces driving foreclosure activity in this housing downturn – high-risk mortgages, negative equity and unemployment – continue to loom over any nascent recovery."
Four states – California, Florida, Illinois and Michigan – accounted for 52% of last month's foreclosures.
Seven of the 10 U.S. metropolitan areas with the worst foreclosure rates were in California: Vallejo-Fairfield; Modesto; San Bernardino ; Bakersfield ; Merced; Stockton; and Sacramento.
Nevada continued to have the nation's worst foreclosure rate: One in 80 Nevada homes got foreclosure notices in October. In Las Vegas, the figure was even worse: one in 68.
But foreclosures were down 4% in Nevada from a year earlier – the first year-over-year drop in the state since RealtyTrac started monitoring the figure in January 2006. RealtyTrac said a state foreclosure mediation program "may be slowing the inflow of distressed properties into the foreclosure pipeline."
Foreclosures shot up 56% in Illinois last month from September.
RECOVERY WATCH:Tracking the economy; see VIDEO
"Despite all the efforts and resources directed at helping homeowners avoid foreclosure, we continue to see foreclosure activity levels that are substantially higher than a year ago in most states," Saccacio said.
Baumohl says vulnerable homeowners with adjustable-rate mortgages are benefiting from low interest rates that keep a lid on monthly payments. But he's worried that rates will rise – and hurt homeowners struggling to make their payments – as the economy improves and businesses start competing for credit with a deficit-ridden federal government.

If you would like to see the chart, state by state stats, shoot me an e-mail.

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