Foreclosures Actually Dropped (If You Don't Count Five States) 21 comments
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IRVINE, Calif. – Sept. 12, 2008 – RealtyTrac, the leading online marketplace for foreclosure properties, today released its August 2008 U.S. Foreclosure Market Report, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 303,879 U.S. properties during the month, a 12% increase from the previous month and a 27% increase from August 2007.
Foreclosure filings were reported on 101,724 California properties in August, one-third of the national total and the most of any state. The state’s foreclosure activity increased more than 40 percent from the previous month and more than 75 percent from August 2007. California, Florida and Arizona together accounted for more than half of the nation’s foreclosure activity.
That last sentence motivated the analysis displayed in the chart above. If you exclude the five states with the biggest foreclosure problems (Arizona, California, Florida, Michigan and Nevada), and analyze foreclosures for the remaining 45 states, the results change dramatically. From July to August, foreclosures actually declined by -.41% in those 45 states, compared to a +12% increase when AZ, CA, FL, MI and NV are included. Over the last year from August 2007 to August 2008, foreclosures barely changed in the 45 states, increasing less than 1% (0.89%), much different than the 27% increase with all states.
Bottom Line: Foreclosure problems are highly concentrated in just five states (AZ, CA, FL, MI and NV), which distorts the national picture significantly. Excluding the five states with the biggest foreclosure problems suggests a much less severe problem, and an actual improvement in August foreclosures in the other 45 states (-0.41% vs. July).
(Note: Foreclosure data are available at RealtyTrac for August 2008. Using the August 2008 foreclosure levels by state and the percent changes from July 2008 and August 2007, the foreclosue levels for August 2007 and July 2008 were calculated for each state. The five states listed above were then excluded to calculate the percentages in the table above.)
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This article has 21 comments:
bankimplode.com/list/t...
you see banks in every state. Why? Four of the Five states were based on a speculation machine that eventually sent the risk to the far corners of the globe via investment vehicles. Following the lead of these "speculation states", local and regional banks funded the 2006/2007 vintages of mortgage-related craziness. Give it a few more months and you will see the impact on these other 46 states, in the form of FDIC Friday afternoon "bank closings". The loss in home value alone has cost local tax collectors billions. Do you think there was one politician that did not see a surplus of funds, generated by higher home valuations, as a long term guarantee to fund one boondoggle after another? You always seem to think short-term. You didn't work in the auto industry before becoming an educator, did you?
1) FL, CA, AZ and NV had values outstrip incomes. They had the most room to go down due to affordability of existing population.
2) The above 4 states had a HEAVY chunk of investment $$$ chasing properties. That artificially drove up demand and everyone who wanted to be in a house went into a house during that time frame. Now we are having supply/demand equalize and it is painful....
3) The above 5 states represent a BIG chunk of total originations due to population. CA and FL are probably 15%-20% of total originations alone. Then, factor in higher property values in those states and you get a disproportionate potential exposure to bank BALANCE sheets, which is what this is really all about....Are firms properly capitalized and financially viable? Some clearly aren't.....WAMU is going to get killed as values continue to erode in CA (my 2 cents)
Who gets to decide what we arbitrarily strip from these numbers. Like S&P earnings minus financials? What does that mean?
Do the words "for the moment" mean anything to you?
At one time, it was just Florida. If my city of Seattle is any indication, you'll want to watch the number of condominiums that come onto the market. They were a big part of this summer's increase in unsold homes.
Call me when the inventory goes below 10 months' supply.
Now that the federal government backstops mortgages, this statistic is meaningless. We're all paying a national mortgage now, no matter what state you live in.
We're all a bunch of suckers
However, he does a point. A local/regional bank that holds a small amount of loans from these 7 states (and no Fannie/Freddie stock or MBS in their investment portfolio) stands a decent chance of surviving the current financial sh$tst$rm.
See what Perry fails to mention is simply this:
The root cause of all the problems we are facing (the credit crisis as a result of leveraged products tied to these prime, alt A, subprime foreclosures) are "IN" the 5 states that he says we can exclude and then everything looks OK.
But we cannot exclude them because those 5 states, coupled with all that leverage, are completely and utterly overwhelming the other 47 states that are not doing as bad.
dansdeepcreekblog.blog...
BLACK KNIGHT:
None shall pass.
ARTHUR:
What?
BLACK KNIGHT:
None shall pass.
ARTHUR:
I have no quarrel with you, good Sir Knight, but I must cross this bridge.
BLACK KNIGHT:
Then you shall die.
ARTHUR:
I command you, as King of the Britons, to stand aside!
BLACK KNIGHT:
I move for no man.
ARTHUR:
So be it!
ARTHUR and BLACK KNIGHT:
Aaah!, hiyaah!, etc.
[ARTHUR chops the BLACK KNIGHT's left arm off]
ARTHUR:
Now stand aside, worthy adversary.
BLACK KNIGHT:
'Tis but a scratch.
ARTHUR:
A scratch? Your arm's off!
BLACK KNIGHT:
No, it isn't.
ARTHUR:
Well, what's that, then?
BLACK KNIGHT:
I've had worse.
Yeah, and if I don't count my belly I weight only 170 pounds.
Who gets to decide what we arbitrarily strip from these numbers. Like S&P earnings minus financials? What does that mean?
**********************...
Come on now Realist, 170? You and I know it would be more like 175, 180 maybe. . .
“Outside of the killings, Washington has one of the lowest crime rates in the country. ” - - - Mayor Marion Barry, Washington, DC“
> jack
There are a number of factors that are still artificially suppressing foreclosure numbers, but as you acknowledged, they're just delaying the invevitable.
In sales, there's a concept called "objections vs. conditions." Objections are things which can be overcome- "You don't have it in my size, do you?"
Conditions are issues that can't be changed, preventing a sale... like, the buyer is completely broke and can't afford to pay attention.
Unfortunately, our "leaders" don't realize that the problems they're trying to "solve" are conditions, not objections.
[This assumes, of course, that *any* of them give a shight about our country.]
Until prices fall to an affordable level, there's no changing direction, only stalling.
In Washington State the feeding frenzy to buy houses has cooled dramatically. In Seattle homes were on the market for just a couple of days, now it's a couple of months and prices are dropping. For sale signs are in every neighborhood. The more rural areas are feeling the pinch of the credt crunch the most where incomes are much lower and jobs are harder to come by.
While RealtyTrac states, "RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank)."
The state laws can expand the number of days until a foreclosure is enacted. Try using this site....
www.foreclosures.com/p...
and see how things have changed. Florida is 180 days? Wasn't it less, before?