Foreclosures.com Says Nearly 1 Million Homes Lost to Foreclosure In 2008; Recovery Seen in 2009
U.S. Foreclosure Index: U.S. Foreclosures About 1 Million in 2008; Fourth Quarter Shows Decline Over Third-Quarter Peak
ForeclosureS.com: Indicators in Place for 2009 Recovery
SACRAMENTO, Calif.--About 1 million homes were lost to foreclosure in 2008, up more than 66 percent from 2007, according to the U.S. Foreclosure Index from ForeclosureS.com, a leading real estate information provider.
In this first look at complete 2008 statistics, the Index also shows nearly 2.1 million pre-foreclosure filings last year, up nearly 62 percent from 2007. Pre-foreclosure actions can include notice of default and/or foreclosure auction leading up to an actual foreclosure.
Month to month, foreclosed properties repossessed by lenders spiked in December, up 19.3 percent to 97,841 from November, when 82,033 properties were foreclosed. The December increase followed two months of steady declines, but December still was 6.1 percent below the peak foreclosure month of September. Pre-foreclosures, which had been slowing until December, also climbed to 190,467 in December, up 11.9 percent from November.
All regions of the country showed increases in lender-owned properties and pre-foreclosure filings in December, ForeclosureS.com analysis shows.
On a quarterly basis, the Index also shows that the number of properties lost to foreclosure, 266,986, and pre-foreclosure filings, 528,241, both dropped in the fourth quarter, 9.2 and 2.4 percent respectively, compared with the third quarter.
“While the sheer number of about 1 million foreclosures is staggering, it was not unexpected,” says Alexis McGee, foreclosure expert, educator, author, and president of ForeclosureS.com. “Since July, we anticipated that we would see about 1 million foreclosures this year.”
“But there is good news – a variety of indicators show that some housing markets are bouncing back and we should see substantial improvement in 2009,” McGee says. “I think 2009 will surprise many people who have bought into the gloom-and-doom agenda.”
“In some areas like California, the housing recovery already has begun,” McGee says. “Inventories of unsold homes will drop quickly this year as people realize that today’s deals on homes are the best they’ll likely see in their lifetimes, both in terms of affordable prices and low interest rates!”
“The earlier declines in foreclosures and pre-foreclosure filings were likely the result of changes in state laws that slowed down the foreclosure process for many homeowners. But lenders played catch-up with foreclosure filings at year-end as December’s numbers indicate,” McGee adds.
“Don’t expect another tidal wave of foreclosures this year, either, just because more adjustable rate mortgages are due to reset,” she says. “Current mortgage rates are at 30 year lows and dropping. Those who qualify will be able to refinance and enjoy lower monthly payments, not higher ones. Those that can’t will end up either selling their homes pre-foreclosure or losing them to foreclosure. But I am anticipating our market can absorb this inventory.”
McGee said her optimism for 2009 is driven in part by positive housing market indicators, including:
- Housing affordability. Thanks to drops in home prices and mortgage rates, housing is the most affordable it's been since February 1994, when a mortgage on a median-price home equated to 18 percent of the median income. Credit Suisse estimates today’s mortgage payment on a median price home in October represented 16.7 percent of median household income based on a 6.23% mortgage. At current 5% interest rates and dropping houses affordability is more likely under 15% of the median income.
- Growing U.S. population. The Census Bureau projects with births, deaths and immigration U.S. population will increase by one person every 14 seconds in 2009. More people mean more demand for housing. Coming housing shortage. Housing construction has plummeted. Housing starts hit record lows in November, off 18.9 percent to a seasonally adjusted annual rate of 625,000 units. New building permits plunged 15.6 percent. That’s great news for housing markets because with fewer homes being built at the same time population — and housing demand — is exploding, the shortfall has to be made up somehow. In this case, it opens the door for the nation’s one million foreclosures to be easily absorbed in the market, and housing supply finally to catch up with demand. Buyers for foreclosure properties. Tighter housing supplies mean buyers will look to foreclosure homes as viable purchase options. “We are so under building right now that whatever new foreclosures do hit the market, I see them offsetting the losses of new housing we need but are not getting,” says McGee.
- Unemployment is an issue, but not as large as some think. “The unemployment rate released by the government for December was consistent with economists’ consensus estimates and came in considerably better than a private forecast released in early January,” McGee says. At 7.2%, unemployment is just shy of the 7.8% experienced during the 1990-1991 recession but still well below our double-digit levels of the early 1980s.
The following charts provide additional information on trends from the latest U.S. Foreclosure Index from ForeclosureS.com:
U.S. FORECLOSURE INDEX:
TOP 10 STATES IN NUMBERS OF REO FILINGS
State Filings Per Household* California 260,709 2.27% Florida 107,833 1.71% Texas 70,037 1.17% Arizona 65,898 3.47% Michigan 62,419 2.09% Georgia 53,423 2.55% Ohio 47,544 1.22% Nevada 37,043 4.99% Colorado 30,132 1.96% Illinois 27,957 0.74% * Percentage of every 1,000 households in state
For all of 2008, California still tops the list in terms of number of REO filings with nearly 1 ½ times as many filings as No. 2 and 3 on the list, Florida and Texas.
On a per household basis – often the best way to judge trends – California ranks a distant fifth with 22.7 of every 1,000 households lost to foreclosure in 2008. That’s behind Nevada (49.9 for every 1,000 households in the state); Arizona (34.7 of every 1,000 households); Mississippi (25.6 per 1,000); and Georgia (25.5 per 1,000). On a quarterly basis, however, California’s 4th quarter REO filings (54,198) plunged 39.44 percent from third quarter (89,501).
U.S. FORECLOSURE INDEX:
TOP 10 STATES IN NUMBERS OF PRE-FORECLOSURE FILINGS
State Filings Per Household* Florida 549,417 8.68% California 453,421 3.94% Arizona 120,066 6.35% Illinois 102,699 2.65% New Jersey 95,689 3.12% Texas 79,890 1.52% Nevada 79,416 10.74% Georgia 56,809 2.29% Michigan 48,040 1.71% New York 47,232 0.99% * Percentage of every 1,000 households in state
Florida led the nation in pre-foreclosure filings in 2008 – 549,417 (up 123.5 percent from 2007) or 86.8 pre-foreclosure filings for every 1,000 households in the state. California took second place with 453,421 (up 64.14 percent from 2007) or 39.4 filings per 1,000 households.
On a quarter to quarter basis, both Florida and California pre-foreclosures dropped in the fourth quarter, 1.08 percent and 20.93 percent respectively.
ForeclosureS.com has been the professional’s source for accurate foreclosure property information for more than 20 years. The company bases its analysis on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, notice of foreclosure auction, and/or notice of REO (lender-owned real estate that occurs after a foreclosed property fails to sell at auction and reverts back to the lender). Pre-foreclosure filings are initial notices that all do not end up as foreclosure.
For more information, please visit www.foreclosures.com
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Alexis McGee is the White Star Line cheerleader......good luck, the others shoes have yet to drop.
Its amazing that Barney Frank and Chris Dodd are walking away from this thing totally unscathed after directing the mortgage companies to give loans to deadbeats or be branded as racists.
Of course, it would help if the media covered the story, but they are too busy with other things.
60 minutes did a 10 minute report that counter this. There are many more foreclosures forecasted for this year and into next due to Option ARMs and Alt-A loans that have rates resetting and causing mortgage payments to double. They are just conning you. Be careful of what you read!
There's more to come... check this link out...
http://articles.mercola.com/sites/articles/archive/2008/12/30/shocking-surprises-still-in-store-in-the-u-s-mortgage-meltdown.aspx
Are we all really this naive? Was this planned by our own government.. or did you forget they write the laws and regulate the supply of money? When "world free trade" opened up... our country could not compete and.... all the jobs that make individual countries strong.. started disappearing on purpose...they wanted them to and allowed it! Since there were no jobs......there was no tax base...pretty simple really.
We never could compete with sweat shops and .30¢ per hour labor overseas and or with companies that had no environmental regulations, codes to follow and no taxes being leveled on foreign manufacturing companies creating huge trade imbalances. We chased our own companies out of the USA so they could survive and escape the onslaught from our own government codes, regulations and controls.... that still goes on today and that sadly now... will get even worse. So no jobs and no tax base here at home...while a couple million Americans are now prospering on foreign soils and spreading our "capitalistic way of life" around the globe which really represents a "silent corporate army" of the USA invading all foreign shores around the world... spreading the good news about capitalism and our way of life. All with the blessings of our own congress! Who regulates the value and flow of all money in our country..through the Federal Reserve and Banking Systems...via congress oversight. How many political parties do we really have?
So...no jobs here at home...means no taxes...what do you do to fund your governments required tax bases? Well they had to increase the flow of money to all sectors and get people to spend money in excess and on credit...and in essence have everyone spend money they did not have and did not earn from performing jobs functions that would have actually benefited the countries economic base. This increased credit and false value system stimulated more tax revenues... and allowed people who made say $50,000 a year spend and additional $15,000 of funny money per year on credit that they did not earn... while stimulating the economy that had no base.... and that did not exist. This allowed for the government to collect taxes on everything that moved which funded and helped expand all local and federal government operations..which now looks like probably 49 states are about to declare bankruptcy. These policies only placed a short term band aid on the "no economy" problem they created.
All of this occurred while you were busy working in temporary jobs set up and created by the government policies promoting the spending of money like crazy that you did not have and based on credit... as your own government set you up via a "ponzi scheme" much greater than the one we are all reading about in the paper.
I now wonder... just who is in charge of this country is it Americans.... or those that promote and understand the Communist Manifesto?
http://www.rense.com/general32/americ.htm
Interesting take on the current real estate situation. I would like to add one fact that still staggers my mind. Of the 1 million homes that went through foreclosure last year 60% of the homeowners NEVER contacted a real estate agent to see if there was a better solution. There are other options such as loan modifications and short sales neither which will impact the sellers credit rating as much as a foreclosure will. The ignorance of the these homeowners will impact them for many years to come but most people are too afraid to ask their banks or call a broker!
One thing people need to know about short sales is there are brokers who are Certified Distressed Property Experts who have been trained to handle short sales. And for a loan modification the first step is to call your bank and if you qualify they will do their best to keep you in your home. You do not need to hire someone and spend money for a loan modification but you do need a realtor to handle the short sale for all Fannie Mae & Freddie Mac loans (which is just about every loan).
Beth Mergens
http://www.FolsomLakeHomes.com