Foreclosure Filings Increasing
New reports indicate that the inventory of distressed properties in the foreclosure pipeline is actually growing in some markets, as foreclosure filings increase in certain states.
March foreclosure filings surged 20 percent in March from February, bouncing back from a 104-month low in February, according to RealtyTrac's foreclosure market report.
Decrease in Completed Foreclosures, Rise in Foreclosure Filings
Research firm CoreLogic stated that February saw a 27.3 percent decrease in completed foreclosures - homes lost to foreclosure - around the U.S. from the same period last year. There were only 39,000 completed foreclosures in February. Following a downward trend, the national foreclosure inventory totaled 553,000 homes in February, down from 761,000 the previous year.
"The foreclosure inventory dropped year-over-year in all but two states," said Anand Nallathambi, president and CEO of CoreLogic. "The foreclosure rates in judicial foreclosure states are beginning to pick up and remain higher than in non-judicial states."
While completed foreclosures fell in February, reports revealed March had higher foreclosure filings. The National Association of Realtors report showed there were 122,060 properties with foreclosure filings in March, a 4 percent increase year over year.
RealtyTrac suggested the rise in foreclosure filings in March was driven by bank repossessions, ahead of default notices and scheduled auctions. Bank repossessions jumped 49 percent month over month to reach over 36,000 in March.
RealtyTrac Vice President Daren Blomquist said March bank repossessions hit a 17-month high, which is linked to a17-month high of scheduled foreclosures auctions held last October.
"Some of the most stubborn foreclosure cases are finally being flushed out of the foreclosure pipeline, and we would expect to see more noise in the numbers over the next few months as national foreclosure activity makes its way back to more stable patterns by the end of this year," Blomquist said in a statement.
Total Existing Home Sales are Increasing
NAR reported that existing-home sales reached an 18-month high in March, with the highest number of sales achieved in the Midwest. Existing home sales of single-family homes, townhomes, condominiums and co-ops grew to 6.1 percent. About 5.2 million homes were sold in March, up from 4.89 million the previous month. The rise in existing home sales is part of a greater trend with six straight year-over-year increases. Sales of distressed properties accounted for 10 percent of all existing-home sales in March.
NAR Chief Economist Lawrence Yun said the growth in housing sales in March could mean good signs for the spring home buying season. He attributed the increase in existing-home sales to the improvement in the job market, which could push more home buyers into the market.
"After a quiet start to the year, sales activity picked up greatly throughout the country in March," Yun said in a statement. "The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years."
Where Foreclosure Filings are Heating Up
Flippers could look to purchase homes in markets where foreclosure activity is strong.
RealtyTrac reported that the states with the highest number of bank repossessions included:
- New Jersey
CoreLogic said the states leading in completed foreclosures in the 12-month period ended in February were:
The No. 1 state, Florida, had 110,000 completed foreclosures.
Borrowers interested in fix and flip projects could also look into states with greater foreclosure inventory as a percentage of all mortgaged homes. CoreLogic reported that the states with highest percentage using this measure were:
- New Jersey
- New York
- District of Colombia
With these markets seeing increased foreclosure activity, opportunities for flippers are clearly still available. P2P lenders like Realty Mogul are here to help!
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