A Look at Foreclosures per State

I am working on a new research project involving foreclosures in the sub-prime market. I keep coming across some really intriguing data sets.

Courtesy of a RealtyTrac, below is a "Heatmap," showing the foreclosure filings on a per capita basis. The Redder the state, the more per capita filings there are.

Kinda surprising the way the concentration shakes out, ain't it? Colorado leads the nation, followed by Nevada, with Texas and Florida not too far behind.

Real Estate Foreclosure Filings
click to enlarge

Courtesy of RealtyTrac

Comments

[NO DooDahs:]

Unless one is into buying distressed properties for resale or rental, this information is useless. I though Seeking Alpha was about investing in the financial markets and not about being a landlord.

The homebuilding stocks bottomed in July and have outperformed the broader market ever since. Investors have already discounted all of the "bad news" in "housing" as noted by the 33% relative price kneecapping taken from May to July.

See the chart.

You can cry and moan about how bad housing is, but the investors in homebuilding stocks already know it. Further, stock market trading isn't about where the companies are going, but where they are going relative to price – and the homeys have already been punished too much for "housing."

2007 Feb 07 10:15 AM

[ritholtz:]

The Homebuilders have improved since the summer -- they became a crowded short, and that's is why we have traded them on the long side since then.

However, you have chosen a very short and advantageous period -- the Homebuilders are still considerably off from their highs. To declare they have bottomed when inventory remains high, foreclosures are accelerating, and prices continue to fall may be premature.

Beezer Homes (BZH) @ 44 still down 45%; KB Homes (KBH) at 55 is 40% below its peak, Pulte Homes (PHM) is up from 216 to 34, but still way below its $48 peak. Lennar (LEN) has had a nice run, but at $55 its running straight into a ton of overhead resistance.

The Homebuilders are a trade -- the way Tech was a trade after its initial collapse in 2000.

But bottomed? Best of luck to ya . . .

2007 Feb 08 06:31 AM

[Wendy Klimt:]

NO DooDahs --

Could you possibly have been more wrong? The subject and the timing was extremely relevant -- The day after this appeared, HSBC blew up, then the homebuilders lost up a few points, and then Friday happened.

Seeking Alpha is about investing in the financial markets -- and this sort of obscure and interesting research is very helpful. And the timing was uncanny.

I doubt arrogant know-it-all attitudes will be rewarded in the market.

2007 Feb 10 03:47 PM

[David Lentz:]

I find that the utility of an otherwise interesting chart is reduced considerably by the lack of a legend relating each color to some quantitative measure. Is the difference between the red and blue only 10% or is it 100%?

But it sure gives the surface appearance of an interesting chart.

Are foreclosures more of an indicator of:

* being over-extended in the local real estate markets?
* local economic weakness, ie, unemployment?
* mortgage-holder aggressiveness (greedy banks)?
* state-specific laws regarding foreclosures?
* supply-demand imbalances?

2007 Feb 07 11:27 AM

[NO DooDahs:]

Good questions all, David, but since Seeking Alpha is billed as "the leading provider of stock market opinion and analysis from blogs, money managers and investment newsletters" I'm still left wondering what the heck foreclosures have to do with the stock market!

All of the bad news about "housing" is out already; homebuilders stocks have rebounded after being excessively punished early in 2006, and are now outperforming the market re: the chart I posted in my previous comment; unless I were a national real estate investor, relative foreclosure rates by state don't do anything to help me.

There is no stock market trade in the data presented.

2007 Feb 07 12:03 PM

[Still Renting:]

I re-entered the market exactly because of general housing market info like what is covered in this short article. I've seen an 11% increase in five months.

This information is VERY germane to the stock market. Oh, and the housing crash is just barely beginning. It will probably peak around this time next year.

2007 Feb 07 02:20 PM

[ritholtz:]

Today's WSJ: <blockquote> "When luxury-home builder Toll Brothers last reported earnings, its chairman, Robert Toll, said the housing market was seeing "a floor in some markets."

The comment added to a bounce in the whole sector. Toll's own stock is up about 10% since then. Investors will get a better idea about how solid the floor is when Toll gives its outlook for its first quarter and fiscal 2007 today. The company's fate will likely depend on which markets have hit a floor. Toll is highly exposed to one of the softer housing markets in the U.S.: the mid-Atlantic. Nearly 40% of its earnings derive from the region, according to Merrill Lynch.

But it isn't clear mid-Atlantic sales have really stabilized. A Raymond James report shows new orders for homes in the Washington area -- which includes northern Virginia -- were down 22% in December from a year ago. That isn't as severe as the 40%-plus year-over-year drops seen in the summer, but still not convincing enough to call a bottom.

What's more, the average number of days homes sat on the market in northern Virginia jumped 28% in the fourth quarter from the third -- and was up 139% from the same period in 2005, according to the Northern Virginia Association of Realtors.

The floor, in other words, might have some cracks."</blockquot...

I guess foreclosures and inventory have nothing to do with sticks . . .

2007 Feb 08 06:51 AM

[NO DooDahs:]

Seeing as how the homebuilders' stocks bottomed in July and have outperformed the S&amp;P 500 since then;

Seeing as how the homebuilders's stocks still (as of mid-Jan) have nearly universal high short interest in terms of days to cover;

Seeing as how your economic-based "read" on stock market direction has been persistently bearish in the face of a prolonged rally, and that "housing" has been a big contributor to your economic viewpoint – based on the 3,710 mentions of "housing" that Google finds on your site;

I have come to the conclusion that your compiled work on "housing" over the last seven months will go down in history as a major contrarian indicator, just as your

cult of the bear I,
cult of the bear II,
cult of the bear III,
BW 2004 prediction,
BW 2005 prediction , and
BW 2006 prediction have.

2007 Feb 08 10:16 AM

[User 140896:]

Has anyone published a list of which banks are currently carrying the most foreclosures?

2008 Jan 16 04:58 PM

[Brit tim:]

I agree, Very useful research and if possible can we see some of the more detailed analysis by state?

2008 Jun 13 11:22 AM

[Andrew Butter:]

Good luck with your research.

Try plotting nominal GDP growth against per-capita foreclosure rate.

Jul 06 06:52 AM