Bankrupting the Common People

Foreclosures Up in 75 Percent of Top U.S. Metro Areas

July 29, 2010

Reuters – Foreclosures rose in three of every four large U.S. metro areas in this year's first half, likely ruling out sustained home price gains until 2013, real estate data company RealtyTrac said on Thursday.

Unemployment was the main culprit driving foreclosure actions on more than 1.6 million properties, the company said.

"We're not going to see meaningful, sustainable home price appreciation while we're seeing 75 percent of the markets have increases in foreclosures," RealtyTrac senior vice president Rick Sharga said in an interview.

Foreclosure actions -- which include notice of default, scheduled auction and repossession -- in the first half rose in 154 of the 206 metro areas with populations 200,000 or more.

"We're not going to see real price appreciation probably until 2013," said Sharga. "We don't see a double dip in housing but we think it's going to be a long painful recovery for the next three years."

Nine of the 10 areas slammed hardest by the foreclosure tidal wave improved from the first half of 2009, suggesting a peak at rates that are still up to five times the national average, RealtyTrac said in its midyear 2010 metropolitan foreclosure report.

Cities with the 20 highest foreclosure rates were all in Florida, California, Nevada and Arizona.

As long as unemployment hovers near 10 percent and unrelenting foreclosures hang over the market, prices cannot stage a lasting comeback. Home prices are about 29 percent lower, on average, than peaks set four years ago.

"If unemployment remains persistently high and foreclosure prevention efforts only delay the inevitable, then we could continue to see increased foreclosure activity and a corresponding weakness in home prices in many metro areas," RealtyTrac chief executive James J. Saccacio said in a statement.

Home prices rose in May for the second month, still propped up by the crush of demand for homebuyer tax credits that ended April 30, according to Standard & Poor's/Case-Shiller indexes.

But that momentum will not last, economists agree.

Unemployment and wage cuts are chipping away at confidence and could slice average prices as much as 10 percent before a gradual climb resumes, many housing experts predict.

Sharga said the recent nominal price increases suggest that lenders so far have managed the distressed property flow well and buyers are bidding for those houses when they do get listed for sale.

Banks will take over at least a record 1 million mortgages this year, RealtyTrac estimated earlier this month, noting that more than 5 million loans are seriously delinquent and face foreclosure.

More than 3 million households are seen getting at least one foreclosure notice this year, and this record will be surpassed slightly at the peak of next year, RealtryTrac expects.

Las Vegas had the country's highest metro foreclosure rate in the first half of the year, with 6.6 percent of its housing units, or one in 15, getting a filing. The number of properties getting a notice, however, fell 9 percent from the same period last year.

Foreclosure Activity Rises in Most U.S. Metropolitan Areas

July 29, 2010

Associated Press - Households across a majority of large U.S. cities received more foreclosure warnings in the first six months of this year than in the first half of 2009, new data shows.

The trend is the latest sign that the nation's foreclosure crisis is worsening as homeowners battling high unemployment, slow job growth and an uneven rebound in home prices continue to fall behind on their mortgage payments.

In all, 154 out of 206 metropolitan areas with at least 200,000 residents posted an annual increase in foreclosure activity between January and June, foreclosure listing firm RealtyTrac Inc. said Thursday.

The firm tracks notices for defaults, scheduled home auctions and home repossessions -- warnings that can lead up to a home eventually being lost to foreclosure.

The latest figures show the threat of foreclosures is spreading well beyond the top tier of metropolitan areas located in California, Florida, Nevada and Arizona, which have borne the brunt of the fallout from the housing crisis.

Those states saw housing values surge during the housing boom years. When the boom ended, values collapsed and foreclosures soared.

"The face of foreclosure is driven much more now by unemployment than in the past, and it's moving out from the places where we've been focusing on in the last few years," said Rick Sharga, a senior vice president at RealtyTrac. "The combination of a weak job market and a weak housing market is making it difficult in some of these areas."

The Miami-Fort Lauderdale-Pompano Beach metropolitan area in Florida received more foreclosure-related warnings in the first half of this year than any other, the firm said.

Florida accounted for nine of the top 20 metro areas with the highest foreclosure rates.

The latest data echo broader, national foreclosure trends.

The number of households facing foreclosure in the first half of the year climbed 8 percent versus the same period last year, but dropped 5 percent from the last six months of 2009, RealtyTrac said in a report issued earlier this month.

In all, about 1.7 million homeowners received a foreclosure-related warning between January and June. That translates to one in 78 U.S. homes.

More than 1 million American households are likely to lose their homes to foreclosure this year, the firm said.

The latest data included one bright spot: Nine of the top 10, hardest-hit metropolitan areas saw their foreclosure rates drop from a year ago. That could suggest foreclosure trends in those cities, including Las Vegas, Cape Coral, Fla., and Modesto, Calif., may have peaked.

"We probably won't know that for sure for another six months," Sharga said.

Still, those areas continue to see foreclosure rates that are as much as five times higher than the national average.

The top 10 metropolitan areas with the highest foreclosure rates has remained fairly unchanged over the past 12 months.

The Las Vegas-Paradise, Nev., metropolitan area topped the list with one in every 15 homes receiving a foreclosure warning in the first half of the year -- five times the national average. But foreclosure filings declined nearly 9 percent versus the first six months of 2009.

Rounding out the rest of the top 10 metros with the highest foreclosure rate in the first half of 2010 were Cape Coral-Fort Myers; Modesto; Merced, Calif.; Riverside-San Bernardino-Ontario, Calif.; Stockton, Calif.; Phoenix-Mesa-Scottsdale, Ariz.; Orlando-Kissimmee, Fla.; Vallejo-Fairfield, Calif.; and Miami-Fort Lauderdale-Pompano Beach, Fla.

The Miami-area metro was the only one among the top 10 to register an annual increase in its foreclosure rate.