From RealtyTrac:
RealtyTrac, the nation’s leading online marketplace for foreclosure properties, today released its Q3 2006 U.S. Foreclosure Market Report showing that 318,355 properties entered some stage of foreclosure nationwide during the third quarter of 2006, a 17 percent increase from the previous quarter and a 43 percent yearly increase from the third quarter of 2005. The nation had a foreclosure rate of one foreclosure filing for every 363 households during the quarter, slightly higher than last quarter’s rate
of one foreclosure filing for every 425 households, but lower than the first-quarter rate of one foreclosure filing for every 358 households.
…
“Higher interest rates and a general softening of the real estate market are the two key factors contributing to the 43 percent increase in foreclosure filings from the third quarter of 2005,” said James J. Saccacio, chief executive officer of RealtyTrac. “What our third quarter research appears to be showing is that the first wave of adjustable rate
mortgages is having a negative impact on the number of homes going into foreclosure. With the volume of these loans — more than $1 trillion of them due to adjust over the next 15 months — this is a trend that definitely bears watching.”
…
“While the overall number of foreclosures represents a return to more or less normal levels, there are pockets of the country that are being hit more severely,” Saccacio noted. “States with underlying economic issues, such as high unemployment or depreciating home prices will continue to outpace the rest of the country in the total number and rate of
foreclosures.”New Jersey
July 2006 – 2,725
August 2006 – 2,992
September 2006 – 3,221
Q3 2006 Total – 8,938
Change from Q2 – 32.51%
Change from Q3 2005 – 49.19%
did i read that right? One in every 370 homes is headed for foreclosure?
up 32.51% from Q2
up 49.19% from Q3
sorry i see you also posted the change form Q to Q. That just seems like sooo many.
i wonder how this splits by town. i’d guess that towns that have lower average incomes would have higher rates. though that may not be the case if even the ‘mass affluent’ stretched to get their suburban dream home. if anyone has insights, it would be interesting to hear.
I believe these are totals at all stages, so it does include the initial Notice of Default (NOD).
jb
the increase is impressive, but weren’t foreclosures at an all time low in the last couple of years? how does the current level compare to the long term rate?
From Bloomberg:
Global Cash Glut Fuels Investment Boom, Rate Concern
Markets around the world are awash in excess cash, fueling a frenzy of investment from London to Tokyo that may lead central banks to push interest rates higher than investors now anticipate.
Money remains cheaper than in the 1990s even after every major central bank raised rates this year, the first simultaneous tightening since 2000. The cash glut is reheating the U.K. housing market, while in Japan companies plan the most investment since 1990. China’s biggest bank this month attracted orders for more than half a trillion dollars with its initial public offering of shares.
“Interest rates in the main economies have still not been raised enough,” says Tim Congdon, visiting fellow at the London School of Economics and one of the “wise men” who advised the U.K. Treasury in the 1990s. “There is a buoyancy in asset prices one gets with high-risk monetary growth.”
Without further tightening, central bankers may have new asset bubbles and inflation risks on their hands. The European Central Bank, whose officials voice the most concern, is convening a conference in Frankfurt next week on the role of money growth in guiding interest rate policy. Among participants: Federal Reserve Chairman Ben S. Bernanke, People’s Bank of China Governor Zhou Xiaochuan and Bank of Japan Deputy Governor Kazumasa Iwata.
Homeowners an optimistic bunch
Few homeowners see home values declining: survey
SAN FRANCISCO (MarketWatch) — Homeowners are either remarkably stable people with their financial houses in order or they’ve got their heads in the sand. Despite news of late that the housing market is slipping, just 6% of homeowners in a survey in August said they think their home’s value will decline in the next 12 months.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B813FB767%2DE7E9%2D4A7B%2DBFAB%2D44376AB391ED%7D&dist=rss&siteid=mktw&rss=1
Few homeowners see home values declining: survey
Denial is a strong emotion. Not much longer before the panic begins.
Mortgage broker defrauds lenders, goes to prison
Fraud scheme brings foreclosures, impacts property values
Monday, October 30, 2006
Inman News
A former mortgage broker in Charlotte, N.C., has been sentenced to five years and five months in prison after pleading guilty to conspiring to defraud mortgage lenders through an elaborate home-selling scheme.
Gordon George, 37, convinced buyers to purchase homes at inflated prices by promising to provide renters who would make the mortgage payments before selling the homes at a profit, prosecutors said. George and his co-conspirators provided false information to lenders to secure loans on the properties, pocketing excess loan proceeds of about $7 million, said U.S. Attorney Gretchen Shappert.
Many buyers lost their houses to foreclosure. A 2003 investigation by the Charlotte Observer found a 60 percent foreclosure rate in one subdivision targeted by George, and property values declined for every house in the neighborhood, the paper reported.
http://www.inman.com/inmannews.aspx?ID=58500
The main wave of foreclosures is yet to come. As more scrutiny is given to appraisals, underwater homeowners will find it harder and harder to refi out of trouble. Right now in many markets lending standards are effectively at their post-Depression all-time low.
now that there is a story about greed isn’t it?
Stages of Grief
* 1. Denial and Isolation.
* 2. Anger.
* 3. Bargaining.
* 4. Depression.
* 5. Acceptance.
iN THE MIDDLE OF 2-3 WHILE 4 WILL HIT HARD IN THE EARLY SPRING WHEN REALIZATION FINALLY HITS IN MID SPRING #5. Then all hell breaks loose.
I see people all over this list… I am waiting for the day where the majority are between four and five.
Property Address Default Amt
937 Garden St
Hoboken, NJ, 07030 $307,000
Property Address Default Amt
519 Willow Ave Unit Apt 8
Hoboken, NJ, 07030 $229,799
Property Address Default Amt
1300 Hudson St UNIT Apt B5
Hoboken, NJ, 07030 $352,800
Property Address Default Amt
325-327 Willow Ave UNIT Apt 5C
Hoboken, NJ, 07030 $283,500
Property Address Default Amt
207 14th St Unit Apt 2R
Hoboken, NJ, 07030 $128,578
just 6% of homeowners in a survey in August said they think their home’s value will decline in the next 12 months.
…Which is the reason consumer spending is still relatively strong. A number of economists have pointed to continued strong consumer spending amid a faltering housing market as a sign of a soft landing. In other words, home prices are falling, but consumers keep spending, so everything is fine. In reality, 94% of homeowners refuse to believe the value of their home is declining, so they continue to spend like its 2005. Consumer spending will take a hit once reality sets in.
I’m not a fan of technical analysis, but on the other hand, for prices to come down the way people are hoping (by next spring), you’d see a non-symmetrical curve with 10 years of gains on one side and then, on the way down, a vertical drop… literally falling off a cliff.
I don’t see that happening. Historically, based on the Shiller chart (the one that seems to sneak onto every thread), it just doesn’t appear to change that quickly. It’s also worth looking at the last chart on this Economist article to compare the Japanese experience:
http://www.economist.com/finance/displayStory.cfm?story_id=4079027
Unless something dramatic happens, I think we’ll see a slow, painful grinding down (with a number of false upticks). I think this will be bad for both both sellers and buyers.
I Agree with “politely”
We will see slow aand painfull process – which will be driven by foreclosures and BK. Since both are slow th real pain will take up to 2 years fom now to develo -think this way – all the excess inventory right no and foreclosures just starting to hit!!!
Florida market – 46 month!!! supply. So once Florida crashed fast andhard and become cheap state, retiring people would want to move there again, but they will need to sell their houses eslewhere.
Hell if houses in florida drop to 100K I will give up my job here, go to florida, find a job which will pay half of mine in NJ and will live a lot better…
And do not tell me it is different here – if people in florida can not sell – they can not buy a home anywhere else in the country, and can a retired person on teh fixed income afford taxes in NJ. Can ANYONE afford taxes in NJ???
I tend to agree with politely too as far as this taking longer than many think it will, but I don’t see the downtrend being symmetrical with the up trend for one big reason: the massive demographic shift brough on by boomer retirement. nothing like this happened during the japanese deflation.
I thinknit is a talent to make a statement but at the same time not to make it – when you say I don’t see the downtrend being symmetrical with the up trend for one big reason: the massive demographic shift brough on by boomer retirement. nothing like this happened during the japanese deflation.
Do you mean it will fall faster?? slower?? won’t fall at all?? there is a big discussion right now on effect of baby boomers – nobody knows what is it.
SP ; regarding:
“though that may not be the case if even the ‘mass affluent’ stretched to get their suburban dream home.”
Follow the SUV’s leaving the food pantries in lower income neighborhoods, and follow them to their mini-mansions. This trend has been happening for years, but I feel the easy loans produced quite a few more “over-extended” citizens.