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A dip in foreclosures from September ‘09 to October ‘09 doesn’t say much; a decrease in bank repossessions doesn’t either.
Numbers recently released by RealtyTrac show that 1 in every 385 homes received a foreclosure related notice in October, that represents more than 332,000 homes. Alarming as that sounds, that’s a 3% dip in foreclosure filings, and represents the third straight monthly decrease. In addition, there were 11,000 fewer repossessions in October than in September.
Break out the champagne; it’s a recovery, right?
I wish it was, but the reality is that federal programs, state programs and lender delays make it impossible for anyone to determine if we’re in, near, or approaching recovery. For instance, Nevada launched a new program in July that gives homeowners the right to demand mediation with their lender; the program slows down the process and accounted for a 27% drop in October filings. Fannie Mae is currently holding over 70,000 foreclosures, and lenders are taking more time to evaluate loans to see if they qualify for Obama’s foreclosure prevention program. The 3% drop might be good, but who can tell?
The only thing we know for sure is that foreclosures would be higher if there wasn’t market intervention.
Job losses, mortgage rate resets and negative equity will keep foreclosure filings at or near record numbers for the foreseeable future. The programs mentioned above prolong the foreclosure process, but serious delinquency data* is quick to illustrate that foreclosures avoided this month are still looming, and could arrive on your street in the near future.
It’s not all doom and gloom though. For qualified buyers in the right area, it might just be a killer time to buy a home. Low interest rates, an increase in sales and home values (in some areas), and the tax credit extension might make buying a new home today a “no brainer”.**
People are buying homes, and they always will, we just need to figure out a way for them to retain ownership. Maybe stricter lending rules and higher down payments are the silver bullet.
What do you think, are the decrease in foreclosures something to cheer about?
*All Loans Seriously Delinquent = 8% & Subprime ARMS Seriously Delinquent = 38.7%. Both numbers have steadily increased since mid ’06. Source
**Consult a professional real estate agent to see if buying is a good move for your family.
Sources:
Foreclosures Dip 3 pct. in October from September – Yahoo!
Foreclosures: ‘Tide may be turning’ – CNNMoney.com
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There is no way to accurately analyze whether the 3% dip in the foreclosure rate is good news or simply a delay in foreclosures hitting the market.
Regardless, there are some awesome deals for new homeowners. If you are considering buying a home, go for it. If you don’t, you will be kicking yourself when the market corrects
.-= Augusta Real Estate´s last blog ..Fantastic townhome in great West Augusta location =-.
I agree that 3% may sound good, but when you dig deep about the true situation it’s still very bad time for the housing market.
Is it a great time to buy? Absolutely! As long as you have a job…which is the biggest problem we face today.
I certainly think that declining foreclosure rates are a good sign for residential housing, but commercial deals and the associated construction projects are still on the wane. Many feel that we’re near the bottom if not already past it… I hope they’re right.
I have to agree. Its just a momentary blip. Until unemployment starts to drop, I don’t think the housing market can recover.
.-= Chas@Las Vegas Real Estate´s last blog ..First Time Home Buyer Tax Credit Extended =-.
Unfortunately you are right, one month of data means nothing. I can show you where we have had huge increases and decreased in average sales price and/or number of homes sold. The media reports it like crazy, but it means nothing.
I see in other real estate blogs same signals, less foreclosures, less normal homes for sell, less viewings on homes. The market is slowly on the back to normal.
The real data that will tell the story will be the number of foreclosures
in the Spring of 2010. With unemployment on the rise and the poor Christmas season it is expected that housing will continue to slump. Following the rest of the economy. Foreclosures up and home values will go down.