2009 Was The Year of Foreclosure in Alameda and Nation

RealtyTrac, released its Year-End 2009 Foreclosure Market Report™, which reported a record 2.8 million U.S properties with foreclosure filings in 2009. The report shows a total of 3,957,643 foreclosure filings — default notices, scheduled foreclosure auctions and bank repossessions — were reported on 2,824,674 U.S. properties in 2009, a 21 percent increase in total properties from 2008 and a 120 percent increase in total properties from 2007.

The report also shows that 2.21 percent of all U.S. housing units (one in 45) received at least one foreclosure filing during the year, up from 1.84 percent in 2008, 1.03 percent in 2007 and 0.58 percent in 2006.

Foreclosure filings were reported on 349,519 U.S. properties in December, a 14 percent jump from the previous month and a 15 percent increase from December 2008 — when a similar monthly jump in foreclosure activity occurred. Despite the increase in December, foreclosure activity in the fourth quarter decreased 7 percent from the third quarter, although it was still up 18 percent from the fourth quarter of 2008.

In Alameda, RealtyTrac currently reports 94 pre-foreclosures, 86 auction properties, and 82 banked owned properties. In 2009, Alameda had 74 foreclose sales and 36 short sales, these 110 sales accounted for 22 percent of the sales on the Island.

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Nevada, Arizona, Florida post top state foreclosure rates in 2009 with more than 10 percent of Nevada housing units received at least one foreclosure filing in 2009, giving it the nation’s highest state foreclosure rate for the third consecutive year.

Nevada foreclosure activity in December increased 27 percent from the previous month but was still down 22 percent from December 2008. Fourth quarter foreclosure activity in Nevada was down 37 percent from the previous quarter thanks to substantial decreases in October and November.

Arizona registered the nation’s second highest state foreclosure rate in 2009, with more than 6 percent of its housing units receiving at least one foreclosure filing during the year, and Florida registered the nation’s third highest foreclosure rate, with 5.93 percent of its housing units receiving at least one foreclosure filing during the year.
Four states accounted for more than 50 percent of the nation’s 2009 total, with more than 1.4 million properties receiving a foreclosure filing in our own California, Florida, Arizona and Illinois combined.

A total of 632,573 California properties received a foreclosure filing in 2009, the nation’s largest state foreclosure activity total and an increase of nearly 21 percent from 2008. After four straight month-over-month declines, California foreclosure activity in December increased nearly 9 percent from the previous month, but the state’s fourth quarter foreclosure activity was still down 17 percent from the previous quarter.

Although Alameda has not had numbers close to the State averages, we have seen an increase in distressed activity. Given the RealtyTrac numbers for Alameda there appears to be even more distressed sales on the horizon.

Alameda Inventory Continues to Stay Flat

I have not been posting the past few days because I have been attending the National Association of Realtors Expo in San Diego. Today is the final day of the gathering and I will be heading back home later today.

It has been good to get the pulse of those who work in the industry everyday, but the jammed pack days have kept me away from my duties of keeping up with our local market.

Over the past nine weeks inventory has been flat ranging between 122 and 135 units for sale. This week inventory stayed in this range at 125 units, but there was a visible increase in distressed properties. In terms of total inventory distressed properties account for 37 percent of the unit, this was a four percent increase from the prior week.


Link to Larger Chart

The raw numbers are not huge with four new foreclosures and on additional short sale added to the market over the past week. Looking at data from RealtyTrac it hows that the island has 101 properties in pre-foreclosure, 64 ready for auction and 84 banked owned. That 84 number is the one that concerns me, not knowing when or if these will be release into the market could add pressure to an already fragile market.

Below is the inventory for the week.

. . 11/16/2009 . Total 125 . 94501 98 . 94502 27 . SFR 75 . Condo 27 . Multi-Family 21 . Short Sale 21 . Foreclosure 15 . Price Reductions 46 . High List $1,899,000 . Low List $149,000 .

Foreclosures Continue to Linger in The Market

Website RealtyTrac reported today that the foreclosure crisis has continued to deepen and has begun to touch areas that have previously been able to avoid much of the housing downturn.

Alameda current status according to RealtyTrac is:

Preforeclosure 94
Trustee Sale 64
Banked Owned 83

These numbers show a rise from June to July.

The rise in foreclosures is a trend nationally and there are new signs that the foreclosure crisis could be spreading to parts of the country that had previously been relatively unscathed. RealtyTrac reported spikes in foreclosures in states like Idaho, Oregon, Utah, and Illinois, where the prolonged recession is cited as the culprit.

Over the past two years the bulk of foreclosures were driven by a combination of risky lending practices and declining home values. The surge in foreclosures has been heavily concentrated in just four states — California, Florida, Nevada and Arizona. These four states accounted for well over half of all foreclosures last month, according to data from RealtyTrac.

The foreclosures appear to be driven by local unemployment. In Alameda County unemployment has gone over 11 percent and the job market continues to be very tight. Much of the flux in the home market will remain until unemployment settles down regionally.

Listed distressed properties in Alameda has seen small decrease this week, but over the past six weeks the number listed on the MLS has been about 13.

The government has slowed the pace of foreclosure with the institution of moratoriums and loan modification programs, but that also means that there is a hidden backlog or shadow inventory of home loans in default that could end up in foreclosure.

There have been several experts predicting a rise in foreclosures in the second half of this year. So it is something we will continue to monitor.

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California Weak and High

Two new reports on the California Real Estate market came out today that details that the market as still very tenuous. New home sales suffered a sharp decline from the prior year and foreclosure filings hit new highs

According to the California Building Industry Association, February sales of new homes in California were down 54 percent from a year ago. This is a modest improvement from the prior month but still a very weak. Sales of single-family homes and townhomes were both down 55 percent from a year ago, while sales of condominiums were off 51 percent.

Not only are sales down but the median base price was also down 15 percent from a year ago and 6 percent from January.

News regarding distressed properties was no better. According to RealtyTrac foreclosure-related filings on U.S. homes during the first three months of the year were up 9 percent from the previous quarter and 24 percent from a year ago, surpassing previous highs for the current downturn.

The 803,489 properties subject to some kind of foreclosure filing during the first quarter -- including default notices, auction sale notices and bank repossessions -- marked a record high since RealtyTrac began reporting in January 2005.

The increase in filings can be attributed to legislative action. Many Banks/Lenders have been holding off on foreclosures because of moratoria and legislative delays. With these programs coming to an end these initiate new foreclosure proceedings.

In Alameda, foreclosures that have reach the MLS have been relatively very few. In fact we peaked in November of last year and have reached a 21 week low for foreclosed homes for sale. That number appears to be understated, according to RealtyTrac Alameda has 92 properties in Pre-Foreclosure, 37 Trustee Sales and 73 Bank Owned.

The 73 Banked owned is troublesome, it means that they, the Banks, are sitting on inventory and the 92 properties that have now entered some face of the foreclosure process means that the Island could see it own wave of distressed properties hit the market in the near future.

Demand for distressed properties by first-time homebuyers and investors has picked up in some hard-hit markets, locally in East Contra Costa County, but given the new news there is a new swell of properties entering the pipeline.

California, Florida, Arizona, Nevada and Illinois accounted for nearly 60 percent of properties subject to foreclosure-related filings during the first quarter, RealtyTrac said. California alone accounted for 29 percent of the properties in some stage of foreclosure -- 230,915 -- a 35 percent increase from the previous quarter, and the highest total seen in the four years RealtyTrac has been issuing reports.

The California State tax credit for new homes purchases in demand with first time homebuyers flocking to the program. The California Franchise Tax Board said it had received more than 3,100 applications for the tax credit, which is available to qualified buyers making purchases during the year beginning March 1, 2009, or until the $100 million allocated for the program runs out. Applications for $30.6 million in tax credits, or nearly one-third of the program's capacity, have been received so far.

The Foreclosure Wave Continues

The foreclosure wave continues to roll across the country and Alameda is not immuned. As long as you have been awake in the last 18-months the foreclosure market has been one hot topic and from what I can tell it may be another 18 before we find something else to talk about in real estate.

To add fuel wave of information to this topic Foreclosures.com announced that completed foreclosures in February reached the highest monthly total since the foreclosure crisis began, soaring by more than 67 percent over January's reduced foreclosures, according to the latest U.S. Foreclosure Index released today by the website.

According to Foreclosures.com: In February, 121,756 new foreclosures were completed, up from 72,694 in January, which had seen a 26 percent drop from December's 97,841 foreclosures. The February number topped the previous monthly high of 104,243 new foreclosures seen last September - then the high-water mark for this crisis. It shows a new wave of distressed properties hitting the market.

Chart of Alameda Listing

Link to Lager Version

In the past three months Alameda saw a peak on February 15, 2009 with 40 distressed properties listed for sale on the MLS and the distressed inventory has remained flat for the past three weeks. Realtytrac as a much bigger number on their website, they list 70 properties that are Banked Owned (a.k.a. Real Estate Owned (REO)). That means their about 40+ properties that are not on the MLS. The website list 186 properties in pre-foreclosure, these are that are behind on payments and foreclosure process has begun. Here is a chart from Realtytrac tracking foreclosure sales:

The Island is seeing the flood leak into our community. Job loss, bad loans and declining home values have been a little more moderate, but the impact is now coming home. The pre-foreclosure number is a real warning signal for what may come. All the efforts by banks and goverment seem to be coming up short.

“Despite the efforts to stem foreclosures by government and many banks, the hopeful signs of the last quarter of 2008 and January didn't follow through in February,' says Alexis McGee, foreclosure expert, educator, and author. 'Many homeowners are in trouble and rising unemployment continues to threaten to intensify the problem.”

The U.S. Foreclosure Index also found the number of pre-foreclosure filings - the original filings that can lead to a foreclosure - increasing to the highest monthly total since the foreclosure crisis began, hitting 207,703 in February, up more than 24 percent from 166,860 in January and up 9 percent from 190,467 in December, the previous monthly high.

Foreclosures increased across the country despite a temporary halts by major banks and Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac previously had foreclosure moratoria from Nov. 26 to Jan. 31, which helped to slow down foreclosures during that period, and reinstated the moratoria in mid-February. Nearly all the bank moratoria have since expired or are about to expire.

The top five states that continue to dominate the numbers of foreclosures for February are California, Florida, Arizona, Michigan, and Texas.

California continues to dominate the numbers:
-- California: 23,988 foreclosures, up 67 percent from January and down 24.7 percent compared to September's high.
-- California: February pre-foreclosures are up 35.4 percent from January, and 7 percent higher from December.

Top 10 States Nationwide REOs Last 6 months

1. California

2. Florida

3. Arizona

4. Michigan

5. Texas

6. Georgia

7. Ohio

8. Nevada

9. Illinois

10. Tennessee

Top 10 States Nationwide Pre-Foreclosure Last 6 months

1. Florida

2. California

3. Arizona

 4. Illinois

5. Nevada

6. Texas

7. New Jersey

8. Georgia

9. Michigan

10. Oregon

Top 10 List Source: Foreclosures.com