Focus on Foreclosure Activity

Since I didn't quite get to this last week, I'm going to try to double up this week on posts if I can find time. It's been a little while since I updated you on what's going on with foreclosure activity in our market, and since its such a key driver of this market, I probably should just do this once a month.

We've seen some fairly stable activity in foreclosures for the past several months by most of the metrics that I use. If you'll take a look at this chart, you'll see that we bounce around a little bit in most of these measures, but there's no real identifiable trend line. We've seen a bit of a drop in the number of new Notice of Trustee's Sale (NTS) filings, but Notice of Default (NOD) filings have been up a bit in recent months. If you look at it, you'll see that you can usually see that NTS trends follow NOD trends by a few months, so it wouldn't be a big shock if we saw an increase in NTS filings in the months ahead. In fact, we might be starting to see that already. I look at the notices in the paper and it looks to me like we're seeing more new filings so far this month.

The red line on that chart shows how many total unresolved sales we have at the end of each month. That dropped off pretty sharply over the past couple of months, but if we are seeing an increase in NTS filings, that should start to edge back up again.

We have about 65 unlisted properties that have gone back to the bank now, which is pretty much in line with what we've seen for the past couple of years. That's at a point where - for reasons unclear to me - we usually get a little bit of a run of REO listings. We'll see if that holds this time.

A preliminary look at the sales for the second quarter (mind you, we're about halfway through that) we appear to be seeing a lower level of REO's as a percentage of sales - around 35% vs. a little over half for the first quarter. That's probably going to be a good sign for prices in the quarter, but that could also shift between now and the end of the quarter if we do get an influx of REO listings.

When I look into my slightly cracked crystal ball, I really don't see any reason to expect any big change one way or the other with the level of foreclosure activity that we have now. Our employment picture locally is in what feels like some kind of permafunk, and we still have about 40% of the properties in our market in a negative equity situation. Short sales seem to be slow in making inroads and have been pretty stagnant in terms of success rates. So until some of these other factors improve, we're going to see foreclosures at about the same rate we're seeing now. Wish I had better news for you.