Overall, data about the real estate markets continues to be ambiguous. RealtyTrac reports that in May foreclosure starts were up 2% from April. What is not clear is whether this is because banks want to quickly make money in markets where prices are rising, or whether many Americans with mortgage troubles finally have reached a point at which they can no longer fight for ownership of their homes, in courts or otherwise.
its U.S. Foreclosure Market Report for May 2013, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 148,054 U.S. properties in May, an increase of percent from the 75-month low in April but still down 28 percent from May 2012. The report also shows one in every 885 U.S. housing units with a foreclosure filing during the month.
The improvement from last year is almost certainly a sign that the overall market has recovered somewhat. But research firms such as Corelogic and Case-Shiller have issued data recently that show the recovery is indeed extremely uneven, with some cities showing home price increases in double-digit percentages, while others have posted very little progress at all. If banks are trying to take advantage of higher real estate prices, they face the same challenges that buyers do, which is that in some markets, selling a home does not yield much if the market is stagnant and, primarily for that reason, many mortgages remain underwater.
Another by-product of accelerated foreclosures is that the activity floods some markets with homes offered at below-market prices. The desire of banks to off load inventory, even at depressed prices, tends to push down the prices of other homes within the neighborhoods in which these foreclosed upon homes are for sale. Thus, the upward trend may encourage banks to sell, but the sales can arrest the price improvement in the same markets.
As has been true since the start of the housing crisis, while a portion of the markets have recovered, the recoveries are from such a low base that home owners in these cities cannot count the recovery as something that helps them individually. The hardest hit markets, such as Nevada and Florida, have a nearly endless volume of houses that have not had sufficient price recovery for their owners to keep them for a period of what is likely to be several years. The mortgage burdens in these areas continue to greatly outweigh any very modest price improvement. RealtyTrac reported on the extent of this damage:
A 20 percent monthly increase in foreclosure activity pushed Florida’s foreclosure rate to highest among the states in May, up from the No. 2 ranking in April. One in every 302 Florida housing units had a foreclosure filing during the month, nearly three times the national average. Florida foreclosure starts jumped 39 percent from a two-year low in April, but were still down 17 percent from a year ago. Scheduled foreclosure auctions in Florida increased 6 percent from the previous month and were up 79 percent from a year ago, while Florida bank repossessions increased 14 percent from the previous month and were up 20 percent from a year ago.
Nevada foreclosure activity increased annually in May after 27 consecutive months of annual decreases, but the state’s foreclosure rate still slipped to second highest among the states after ranking No. 1 in April. One in every 305 Nevada housing units had a foreclosure filing during the month. The increase in overall foreclosure activity in Nevada was driven primarily by an 81 percent year-over-year increase in foreclosure starts, which reached a 20-month high in May. Meanwhile scheduled foreclosure auctions in Nevada increased 21 percent from the previous month but were still down 14 percent from a year ago, and bank repossessions increased 4 percent from the previous month but were still down 64 percent from a year ago.
Ohio posted the nation’s third highest state foreclosure rate for the second month in a row in May, with one in every 584 housing units with a foreclosure filing during the month. A total of 8,770 Ohio properties had a foreclosure filing during the month, down 27 percent from a 31-month high in April and down 15 percent from May 2012. Ohio foreclosure starts and scheduled foreclosure auctions both decreased in May, but bank repossessions were still up 7 percent from a year ago — the ninth consecutive month with an annual increase in bank repossessions.
Maryland foreclosure activity increased 11 percent from the previous month and was up 134 percent from a year ago, and the state posted the nation’s fourth highest foreclosure rate in May: one in every 587 housing units with a foreclosure filing.
South Carolina foreclosure activity decreased 2 percent from the previous month and was down 11 percent from a year ago, but the state still posted the nation’s fifth highest state foreclosure rate in May: one in every 600 housing units with a foreclosure filing.
Other states with foreclosure rates ranking among the 10 highest nationwide were Illinois (one in every 606 housing units with a foreclosure filing), Georgia (one in 693 housing units), Washington (one in 736 housing units), Arizona (one in 742 housing units), and Wisconsin (one in 774 housing units).
Top metro foreclosure rates in Florida, Nevada, Pennsylvania and Illinois cities
With one in every 209 housing units with a foreclosure filing, Miami posted the nation’s highest foreclosure rate in May among metropolitan statistical areas with a population of 200,000 or more. Foreclosure activity in the Miami metro area increased 29 percent from the previous month and was up 59 percent from a year ago.
Five other Florida metro areas posted foreclosure rates that ranked among the top 10 in May: Jacksonville at No. 2 (one in every 225 housing units with a foreclosure filing); Tampa at No. 3 (one in every 290 housing units); Orlando at No. 7 (one in every 336 housing units); Ocala at No. 9 (one in every 352 housing units); and Sarasota at No. 10 (one in every 360 housing units).
Other metro areas with foreclosure rates ranking in the top 10 were Las Vegas at No. 4 (one in every 296 housing units); Reno, Nev., at No. 5 (one in every 301 housing units); Reading, Pa., at No. 6 (one in every 306 housing units); and Rockford, Ill., at No. 8 (one in every 347 housing units).
If the housing markets have started to improve as much as most analysts claim, there is plenty of data to demonstrate that the optimism is misplaced, at least when it is considered from market to market.