| A new report from real estate data collector RealtyTrac shows U.S. foreclosure filings were up 3 percent in April compared with March and up 9 percent from the same time last year, reaching their highest levels in over a year. The U.S. foreclosure rate in April was one in every 1,049 housing units with a foreclosure filing, according to RealtyTrac.
The increase in April was driven primarily by a jump in bank repossessions (REOs), which at 45,168 were up 25 percent from the previous month and up 50 percent from a year ago to a 27-month high. REOs increased on a year-over-year basis for the second consecutive month. The spike in April REOs is still 56 percent below the peak of 102,134 REOs in September 2013.
“The REO increase in April was foreshadowed by a 23-month high in scheduled foreclosure auctions in October 2014,” Daren Blomquist, vice president at RealtyTrac, said in a statement. “Many of those scheduled auctions are now taking place, and properties are going back to the foreclosing lender. Meanwhile we continue to see foreclosure starts decrease, and foreclosure starts nationwide are now running consistently below pre-crisis levels — indicating that the overall increase in foreclosure activity in April is a continuation of the clean-up phase of the last housing crisis, not the start of a new crisis.”
“While distressed sales typically have a stifling effect on the housing market, in this particular market an influx of distressed inventory could actually help stimulate sales during the spring and summer buying season as new listings become available, often in the middle to lower ranges of the market,” Blomquist added. “Banks are liquidating these distressed properties in a seller’s market with a low supply of inventory for sale, which should help them sell quickly and at a price that is relatively close to full market value.”
The average sale price of REOs sold in the first quarter was 87 percent of the average estimated market value of those same properties at the time of sale. In some markets, REOs sold at a much higher price-to-value ratio, including San Diego (100 percent); Charlotte, N.C. (100 percent); San Francisco; (97 percent), Bakersfield, N.C. (97 percent); and Portland, Ore. (97 percent).
REO properties that sold in the first quarter sold an average of 243 days after being repossessed via foreclosure, down from an average of 300 days for REOs sold in the fourth quarter of 2014 but up from an average of 226 days for REOs sold in the first quarter of 2014.
Following the national trend, 33 states posted a year-over-year increase in REOs, including Florida (up 42 percent), California (up 53 percent), Michigan (up 198 percent), Illinois (up 46 percent) and Ohio (up 63 percent).
A total of 51,773 U.S. properties started the foreclosure process for the first time in April 2015, down 3 percent from the previous month and down 5 percent from a year ago — the fourth consecutive month with a year-over-year increase in foreclosure starts nationwide. Despite the decrease nationwide, 18 states posted a year-over-year increase in foreclosure starts, including Massachusetts (up 91 percent), Nevada (up 64 percent) and New York (up 31 percent).
According to RealtyTrac, 46,777 properties were scheduled for foreclosure auction in April, down 8 percent from the previous month and down 5 percent from a year ago. Despite the decrease nationwide, 21 states posted year-over-year increases in scheduled foreclosure auctions, including New York (up 82 percent), Massachusetts (up 33 percent), Nevada (up 31 percent) and New Jersey (up 22 percent).
Despite a 6 percent year-over-year decrease in foreclosure filings, Florida still had the highest state foreclosure rate in April: one in every 425 housing units with a foreclosure filing — nearly 2.5 times the national average.
RealtyTrac noted in their report this month that they have begun receiving some REO sales data from a new, speedier source, which may result in some sales being reported in April which would have been reported in later months under their old methodology.
