Mortgage Advice

Nevada Relinquishes “Top Foreclosure State” Title

Foreclosures March 2012

According to foreclosure-tracking firm RealtyTrac, foreclosure filings fell to 199,000 in March 2012, a 17 percent decrease from March 2011. Last month marks the first time since July 2007 that foreclosure filings numbered less than 200,000 on a monthly basis — a span of nearly 5 years.

The generic term “foreclosure filing” is used to group all types of foreclosure activity into a single reading. It includes default notices, scheduled auctions, and bank repossessions.

As in most months, foreclosure density varied by region. 6 states accounted for more than half of the nation’s repossessed homes in March.

Florida : 13.6 percent of all bank repossessions
California : 12.0 percent of all bank repossessions
Georgia : 8.0 percent of all bank repossessions
Michigan : 7.5 percent of all bank repossessions
Arizona : 6.5 percent of all bank repossessions
Illinois : 6.4 percent of all bank repossessions

At the other end of the spectrum, North Dakota and Washington, D.C. were home to the fewest bank repossessions, with 0.03% and 0.02% of the national total, respectively.

Also noteworthy is that the RealtyTrac report revealed that Nevada relinquished its title as Top Foreclosure State after 62 consecutive top-ranking months. In March, 1 in every 301 Nevada homes received some form of a foreclosure filing. The March rate was a nation-topping 1 in 300 in neighboring Arizona.

For Chicago home buyers, today’s foreclosure market represents an interesting opportunity.

Homes purchased while in the various stages of foreclosure can often be bought at lower prices relative to homes not in foreclosure. It’s one of the reasons why foreclosed homes now account for 20 percent of all home resales.

However, don’t confuse less expensive for less costly.

Foreclosed homes are often sold “as-is” and may be in various stages of disrepair. Fixing a foreclosed home to make it habitable could wipe out the money saved on its price tag. Your best real estate “deal”, therefore, may be a non-distressed home in sound, move-in ready condition.

If you’re buying foreclosures — or even considering it — be sure to talk with a real estate agent first. The process of buying a foreclosed property is different from buying a “regular” home. You’ll want somebody experienced on your team.

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Single-Family Housing Starts Slip 0.2% In March

by Joshua Bucio

Housing Starts Tuesday, the government released its March 2012 New Residential Construction report.

The report is made up of three sections, each related to a phase of the “new home” market. The report’s first part is Building Permits; the second is Housing Starts; the third is Housing Completions.

Of the three sections, it’s Housing Starts that gets the most attention from the press — mostly because, of the triad, it’s the simplest for a layperson to understand. However, the manner in which Housing Starts data is reported can be misleading.

Today’s newspapers offer up an excellent example.

According to the Census Bureau, total Housing Starts fell by 6% in March as compared to the month prior. 654,000 units were started on a seasonally-adjusted annualized basis.

For Housing Starts, it’s the lowest reading in 5 months, a statistic suggesting that the housing market may have lost some momentum. Much of the press covered the story from a “housing is slowing” angle.

A few published headlines include :

U.S. Housing Starts Unexpectedly Drop To 5-Month Low (BusinessWeek)
New Home Constructions Takes Pause (CNNMoney)
A Delayed Winter For Housing (US World And News)

Although these headlines are accurate, they tell just half of the story.

Housing Starts did drop in March, but if we remove a subset of the data — structures with “5 or more units”; a grouping that includes condominiums and apartment buildings — we’re left with Housing Starts for single-family residences only. It’s this data that matters most to buyers in Milwaukee and nationwide.

Few home buyers buy entire apartment buildings. Most buy single-family homes.

In March, single-family Housing Starts were down 0.2% from the month prior, or just 1,000 units on a seasonally-adjusted, annualized basis.

That’s hardly a drop at all.

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