'Confirming Indicators' Up
There is some foreclosure news out this morning. "National real estate foreclosures increased in every quarter of 2005, according to an industry report released today. 'U.S. foreclosure numbers climbed steadily over the course of the year, with more new foreclosures reported in every quarter," said James J. Saccacio. 'This trend appears to be moving the real estate foreclosure market back to its historic levels.'""Despite a 29 percent decrease in new foreclosures from the first quarter to the fourth quarter, Florida documented the nation's highest foreclosure rate and accounted for more than 14 percent of the nation's new foreclosures in 2005. 1.5 percent of Utah households entered some stage of foreclosure in 2005, the nation's third-highest annual foreclosure rate. New foreclosures in Texas increased 54 percent from the first quarter to the fourth quarter."
"Other states with foreclosure rates ranking among the 10 highest nationwide were Georgia, Arizona, Indiana, New Jersey, Ohio and Tennessee. All of these state documented annual foreclosure rates of at least 1 percent of total households and reported new foreclosures increasing from the first quarter to the fourth quarter."
"California reported 61,563 properties entering some stage of foreclosure, and new foreclosures increased 16 percent from the first quarter to the fourth quarter. New York reported 37,068 properties entering some stage of foreclosure, and the state reported more than twice as many new foreclosures in the fourth quarter as in the first quarter."
And Biz Money had this Q&A with Mr. Saccacio. "Q: What does the rise in foreclosures predict about New York City housing prices in the year to come? A: They don't predict, foreclosures aren't leading indicators, or lagging indicators, either. They're confirming indicators."
"Q: What's a confirming indicator? A: It validates the real estate appreciation or depreciation in an area. To the extent housing prices are going up, you'll see lower foreclosure rates, because people have the wherewithal to cure the default, through refinancing or the sale of their home."
posted by Ben Jones @ 11:32 AM
1 Comments:
Chip, you are right, the REO market is most likely going to be more highly exposed in the future. This could really cramp our style for finding those gems at dirt prices.
However, perhaps the competition just won't be there because the greedy lost their shirts in this bust.
The foreclosure process is probably going to start varying in the states that don't have set time periods. I know in California, some lenders have allowed borrowers slide with payment for a year before even sending a NOD! I even saw evidence of this when I did NOD look ups. But this was when 20% increases were seen, and owners were given ample chance to refinance. With values declining, perhaps the time will contract to the least possible days.
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