Surprisingly mixed messages in March 2011 foreclosure data
RealtyTrac released their monthly foreclosure data the other day. As expected, foreclosures were down because the lenders have been forced to delay foreclosures due to improperly processed paperwork.
The highlights:
Foreclosures in the first quarter of 2011 were down 27 percent compared to the first quarter of 2010
Foreclosures in the first quarter of 2011 were down 15 percent compared to the fourth quarter of 2010
Foreclosures in March 2011 were down 35 percent compared to March 2010
“The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low,” said James J. Saccacio, chief executive officer of RealtyTrac. “Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork.”
Let's take a look at a few of the statements above as it relates to the current conditions found in the Charleston real estate market.
Housing market continued to languish - not really, March sales in the Charleston area were 9 percent higher than last year AND there is no home buyer tax credit this year. Sales were up 11 percent for homes selling for less than $300,000, the move up market was very strong with sales up 15 percent for homes selling between $300,000 and $600,000 but the luxury Charleston market was down 14 percent for homes selling over $600,000 after a very strong 2010.
Weak demand, declining home prices and lack of credit availability - not really, if sales are higher, then demand must be as well, prices have been extremely stable in Charleston and while marginal borrowers might have difficulty getting a mortgage loan, isn't that what caused all the housing problems in the first place.
Looming shadow inventory - oh come on, we've been hearing that all this shadow inventory is going to come on the market for over two years now, where is it already.
Foreclosures will increase again (once lenders clean up their paperwork) - probably true but take a look at the chart below from Calculated Risk which clearly shows that non current and delinquent loans have been trending down which is very good news indeed.
