It’s been 7 years since the mortgage meltdown when bank-owned properties flooded the market. Today completed foreclosures are down to half of what they would be in a normal market…except in a handful of states where it’s not over yet.
According to CoreLogic’s April 2016 National Foreclosure Report, foreclosure inventory declined by 23% and completed foreclosures declined by 15.8%, compared to last year at the same time.
The number of completed foreclosures nationwide was 37,000, which is 69% less than the peak of September of 2010 when there were over 117,000.
Foreclosure “inventory” represents homes at some stage of the foreclosure process and “completed” foreclosures reflects the total number of homes that have been taken back by banks and resold.
Since the financial crisis began in September 2008, there have been approximately 6.2 million completed foreclosures nationally. But things have made a dramatic turn around since then.
As of April of this year, only 1.1% of all homes with mortgages were in the foreclosure process, which is the lowest rate of any month since 2007.
CoreLogic also reports that 1.1 million mortgages, or 3% of all mortgages, are currently in serious delinquency. This is the lowest rate since October of 2007.
Serious delinquency is defined as loans that are 90 days or more past due, and includes loans in foreclosure or REO’s (bank owned properrties).
What’s interesting is that 41% of all completed foreclosures in April took place in just 5 states.
Florida had the highest number, with over 69,000 completed foreclosures over the past 12 months.
Michigan came in 2nd with 48,000 foreclosures. Texas was 3rd with 28,000, then Georgia and California each had 23,000.
CoreLogic chief economist, Dr. Frank Nothaft said, “The recovery in home prices and improved labor market have contributed to the drop in seriously delinquent rates.” He added that home prices rose 6.2 percent this past year and the labor market gained 2.6 million jobs.
But we’re not out of the woods, yet.
Even though rising home prices have reduced the number of homeowners with negative equity by two-thirds since its 2010 peak, about 4 million homeowners remained underwater at the end of March.
Corelogic also released a report on the hottest buyer’s and seller’s markets in the U.S. in April.
Buyer’s and seller’s markets are based on the area’s current inventory and average days on market.
Homes are more likely to sell above asking price in seller’s markets and below asking price in buyer’s markets. So it’s best to sell in a seller’s market and buy in a buyer’s market. Unfortunately, the majority of people, buyers and sellers get this backwards.
CoreLogic’s April report showed that most of the top seller’s markets were in the Western region of the U.S.
Seattle ranked as the top seller’s market with slightly more than a one-month supply of homes, and average days on the market just over one month.
Denver and Boulder were in 2nd and 3rd place, also with just over one month’s supply of housing.
San Jose and San Francisco, CA were in 4th and 5th place as the hottest seller’s markets with just 1.5 months supply and properties selling in 30 days. Portland and Dallas also made the top 10.
These are the same cities that were listed as the hottest seller’s markets on yesterday’s existing home sales data from the National Association of Realtors, but in different order.
San Francisco came in at the top on that report, with Seattle in 2nd place.
Outside the typical top seller’s markets, Nevada had two top-ranked seller’s markets on CoreLogic’s list: Reno and Carson City. This is good news for one of the hardest hit states during the recent housing crash.
Hood River, Oregon, is new to the top 25 seller’s markets. This jump could be due to its proximity to Portland and the area’s increasing appeal as a top vacation destination.