Cities With The Most Homes In Foreclosure

According to data released last week, the worst effects of the housing crisis are beginning to wind down. RealtyTrac’s latest report shows the number of foreclosures in the U.S. in April is down 13% to 188,780 from 219,258 a year ago. However, some of the largest cities in the U.S. continue to lag behind the rest of the country, and still have long to go before the housing crash has fully run its course.

RealtyTrac published the number of new home foreclosures in April in the 50 largest metropolitan statistical areas in the U.S. Of those 50 areas, ten had more than double the national foreclosure rate, which is one out of every 698 new homes. In California’s Inland Empire metropolitan area, the rate was more than triple that. Using RealtyTrac’s foreclosure rates and and home price data from Fiserv Case-Shiller, 24/7 Wall St. reviewed the ten metropolitan areas with the highest foreclosure rates.

The continuing high rates of foreclosures in some areas is a disturbing trend, says RealtyTrac’s vice president, Daren Blomquist. Although the national foreclosure rate appears to have peaked, he explains, the massive number of remaining properties yet to be foreclosed may continue to hurt the U.S. market in the long-term. The large number of new foreclosures “means that distressed property sales will continue to represent a large portion of overall sales for at least the remainder of this year, which in turn will keep a lid on any robust home price recovery,” Blomquist says.

After reviewing the markets with the highest foreclosure rates, it is clear that regions with the most foreclosures to date are the ones worst affected by the housing crisis. Seven of the ten metro areas on this list had among the top ten largest declines in home value from their pre-recession peaks. In six of the ten regions, houses lost more than half their value in less than six years. In Las Vegas, home prices plummeted 61.8% between the beginning of 2006 and the end of last year.

While all ten metropolitan areas on this list have a high foreclosure rate compared to the national average, in some cities foreclosures have begun to decline, while in others they continue to increase. For example,  Of these regions with the highest foreclosure ,rates the number of new foreclosures fell by 44% in Phoenix and by 66% in Las Vegas in one year. Meanwhile, foreclosures rose 38% in Miami and 59% in Tampa.

24/7 Wall St. spoke with Trulia’s chief economist Jed Kolko. According to Kolko, while the overall decline in home prices is the major underlying force behind these areas’ high foreclosure rates, it is the legal system of the regions’ respective states that is affecting whether foreclosures are still rising or declining. Florida has a long foreclosure process, which involves the courts on many occasions, while Nevada’s process is much shorter and non-judicial. Florida is therefore far behind in liquidating its foreclosure inventory, while Nevada is far along the process.

24/7 Wall St. examined RealtyTrac’s latest foreclosure figures of new homes for April, 2012, as well as the changes in the number of new foreclosures from a month prior and a year prior. In addition, we reviewed historical, current, and projected home price changes, provided by Fiserv-Case Shiller.

These are the ten cities with the most homes in foreclosure

10. Orlando-Kissimmee, FL
> Foreclosure rate: 1 in 347 homes
> Number of homes: 942,312 (24th most)
> Foreclosures (April, 2012): 2,717 (16th most)
> Home price decline from peak: 54.2% (6th largest decline)

Median home prices in the Orlando area fell by 54.2% from their peak in the second quarter of 2006 through the end of 2011. Of the 50 most populous metro regions in the U.S., the Orlando-Kissimmee area has the tenth-highest foreclosure rate in April of one in every 347 homes. Orlando had 2,717 new homes in foreclosure this past April, up 12.9% from the 2,406 in April, 2011. The forecast for the future is similarly bleak. Fiserv projects Orlando homes to continue to lose value between the fourth quarter of this year and the fourth quarter of 2013, predicting a 1% decline in prices over that time period.

9. Chicago-Naperville-Joliet,IL-IN-WI
> Foreclosure rate: 1 in 321 homes
> Number of homes: 3,797,247 (3rd most)
> Foreclosures: (April, 2012): 11,840 (The most)
> Home price decline from peak: 36.8% (12th largest decline)

From their peak in early 2007, home prices in Chicago fell 36.8% through the end of 2011. In April, the Chicago-Naperville-Joliet metro area had the largest number of new homes in foreclosure among the 50 largest MSAs, at 11,840. This represented an increase of 25.5% from April 2011 when 9,433 homes entered foreclosure. However, the number of foreclosures represents a 7.63% decline from March, when the Chicago area also led all metropolitan areas with 12,818 foreclosures. Another positive sign for Chicagoans: home prices are projected to rise 6.3% annually through 2016, according to Fiserv.

8. Tampa-St. Petersburg-Clearwater,FL
> Foreclosure rate: 1 in 315 homes
> Number of homes: 1,353,158 (17th most)
> Foreclosures: (April, 2012): 4,295 (8th most)
> Home price decline from peak: 48% (8th largest decline)

Residents of the Tampa, FL metro area watched the median home price in the region fall to $137,000 in the fourth quarter of 2011 — a 48% drop from its peak. The region recorded 4,295 foreclosures in April 2012. To make matters worse, that number is up from the April 2011 figure. Last April, only 2,701 new area homes were in foreclosure, meaning that foreclosures increased by 59% the past year. One in every 315 homes in this MSA had a foreclosure start this past April.

7. Phoenix-Mesa-Scottsdale,AZ
> Foreclosure rate: 1 in 313 homes
> Number of homes: 1,798,501 (12th most)
> Foreclosures: (April, 2012): 5,755 (6th most)
> Home price decline from peak: 56% (3rd largest decline)

Home prices in the Phoenix region — the country’s twelfth-largest metropolitan area by housing units — declined by 56% from their 2006 peaks through the end of 2011. Although this accounted for the third-largest decline in home prices amongst all metropolitan areas, the Phoenix region posted a 22.64% decline in foreclosures from March, as the number of new foreclosed homes fell from 7,439 to 5,755. Likewise, in the last year, the number of foreclosure starts in the area fell by 44.44%, from 10,358 in April 2011 to 5,755 this past April.

6. Salt Lake City, UT
> Foreclosure rate: 1 in 309 homes
> Number of homes:410,031 (1st least)
> Foreclosures (April, 2012): 1,326 (23rd least)
> Home price decline from peak: 19.3% (25th largest decline)

Home prices in the Salt Lake City area declined by roughly 20% from their peak in 2007 to the fourth quarter in 2011, which is a modest decline compared to other regions on this list. Nevertheless, foreclosure rates were higher than all but five of the largest metros in the country. Compared to the 1,406 foreclosures in April of 2011, April 2012’s foreclosures declined by 5.7%. This metro area is one of the few on the list that analysts are bullish about; home prices are projected to increase by 9.5% from this year’s fourth quarter to the fourth quarter in 2013.

5. Atlanta-Sandy Springs-Marietta,GA
> Foreclosure rate: 1 in 298 homes
> Number of homes: 2,165,495 (9th most)
> Foreclosures: (April, 2012): 7,271 (4th most)
> Home price decline from peak: 35% (14th largest decline)

As of the fourth quarter of 2011, home values in Atlanta fell by 35% from their peak. The Atlanta area has the ninth most housing units of any region on the list, at 2,165,495, and the median price of these homes was just $110,000 in the fourth quarter of 2011. To make matters worse, the area’s April 2012 foreclosure figure was a staggering 7,271 homes — the fourth most among the nation’s largest cities. Things may be on the upswing though — from the number of homes in foreclosure fell by 11% from the prior month.

4. Sacramento-Arden-Arcade-Roseville,CA
> Foreclosure rate: 1 in 277 homes
> Number of homes: 871,793 (23rd fewest)
> Foreclosures: (April, 2012): 3,147 (12th  most)
> Home price decline from peak: 54.7% (5th largest)

The first California city on this list, the Sacramento-Arden-Arcade Roseville area had one in 277 homes in foreclosure in April. With home prices down 54.7% from their high at the end of 2005, the Sacramento area registered the fifth-largest decline in home prices. The area had the twelfth-most foreclosures in the U.S. However, foreclosures are down by 39.01% from last year, when April 2011 had 5,160 homes in foreclosure. Additionally, the number of foreclosures also decreased by 26.7% from the previous month, from 4,294 to 3,147. Fiserv expects home prices in the area to rise 6.3% annually through the fourth quarter of  2016.

3. Miami-Ft. Lauderdale-Pompano Beach,FL

> Foreclosure rate: 1 in 273 homes
> Number of homes: 2,464,417 (5th most)
> Foreclosures: (April, 2012): 9,031 (3rd most)
> Home price decline from peak: 54.2% (7th largest decline)

The Miami metro region topped all  Florida regions in the number of new foreclosures. It also ranks third in new foreclosure rates among the 50 largest metros with 9,031 foreclosures in April, 2012 — a rate of one in 273. While foreclosures in the area decreased between March, 2012, and April, 2012, to the tune of 9.2%, the future appears gloomy. Prices in this region are forecast to fall another 3.8% between the fourth quarters of 2012 and 2013.

2. Las Vegas-Paradise, NV
> Foreclosure rate: 1 in 249 homes
> Number of homes: 840,343 (22nd fewest)
> Foreclosures: (April, 2012): 3,378 (10th most)
> Home price decline from peak: 61.8% (the largest decline)

Home prices in Las Vegas, the poster child of the housing crisis, plunged by 61.8% from their peak in early 2006 through 2011 — the greatest decline of any of the nation’s 50 largest metros. Although new foreclosures in the Las Vegas-Paradise region declined by 66.1% to 3,378 over the past year, the number of foreclosures in April represents a slight increase over March, when 3,301 new homes were in foreclosure. Making matters worse, prices are expected to fall by another 3.3% between the fourth quarter of 2012 and the fourth quarter 2013, according to Fiserv.

1. Riverside-San Bernardino-Ontario,CA
> Foreclosure rate: 1 in 213 homes
> Number of homes:1,500,344 (14th most)
> Foreclosures: (April, 2012): 7,049 (5th most)
> Home price decline from peak: -56.6% (2nd largest decline)

As of the fourth quarter of 2011, prices in the Riverside metro area fell by 56.6% from their peak, the second largest drop among top-50 metros. In addition, this region is first in terms of now foreclosure rate, at one in 213. While the number of homes (1.5 million) ranks 14th of the 50 largest regions, the area’s new foreclosure count for April, 2012, reached 7,049 — fifth highest overall. It appears, however, that, the situation is improving; between March, 2012 and April, 2012, foreclosures dropped 10.8%.

-Michael B. Sauter

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