Foreclosure Market Hits 5-Year Low
Good news! The U.S. foreclosure rate is much lower than it was a year ago!
According to the RealtyTrac U.S. Foreclosure Market Report for the first quarter of 2012, foreclosure filings are down 16 percent from the first quarter of 2011. Foreclosure rates haven’t been this low since the fourth quarter of 2007!
During the first quarter of 2012, foreclosure filings were reported on 572,928 properties, which is also down 2 percent from the previous quarter. This has been the lowest quarterly total since 2007, when 527,740 properties with foreclosure filings were reported.
In March, foreclosure filings were reported on 198,853 U.S. properties, showing a 4 percent decrease from February and a 17 percent decrease from March of 2011.
Brandon Moore, Chief Executive Officer of RealtyTrac shares, “The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated. There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March," said Moore. "The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity.”
The decreasing activity in states that use the non-judicial foreclosure process is the primary cause of the nationwide decrease in foreclosure activity. Combined, these 24 states, including the District of Columbia, had 329,854 properties with foreclosure filings during the quarter, or more than half the national total. Still it was a decrease of 8 percent from the previous quarter and impressively a decrease of 28 percent from the first quarter of 2011.
Twenty non-judicial states registered year-over-year decreases in foreclosure activity. Starting with the largest decrease, Arkansas had a 79 percent drop, followed by Nevada, with a 62 percent drop. Yet due to disruptive legislation and court cases, both of these states did not go through a normal foreclosure process. Other non-judicial states with substantial year-over-year decreases in foreclosure activity included Washington with a 55 percent decrease, Arizona with a 41 percent decrease, Texas with a 31 percent decrease, and California with a 21 percent decrease.
Unfortunately, states that primarily use the judicial foreclosure process experienced an increase in foreclosure activity. Combined, these 26 states accounted for 243,074 properties with foreclosure filings during the quarter, resulting in an increase of 8 percent from the previous quarter and an increase of 10 percent from the first quarter of 2011.
The judicial states posting some of the biggest year-over-year increases in foreclosure activity in the first quarter included Indiana with an increase of 45 percent, Connecticut who was up 38 percent, Massachusetts with an increase of 26 percent, Florida up 26 percent, South Carolina up 26 percent, and Pennsylvania who had a 23 percent increase.
Although there is an increase in some judicial states, the overall foreclosure market is at its five year low and that is positive news that we are all glad to hear!