A consensus is growing among different foreclosure reporting services that at last foreclosures have plateaued and will start to slowly decline.
Foreclosure Support, an online listings provider of foreclosed homes for sale, reported that foreclosures dropped 9 percent nationwide during the month of April, leading experts to speculate that the foreclosure homes market may finally have plateaued. In addition to the 9% drop since March, foreclosures fell 2% from April of 2009, marking the first year since the foreclosure crisis began that the market has seen an overall drop.
RealtyTrac® also found foreclosures fell in April. Scheduled auctions and bank repossessions were reported on 333,837 properties in April, a 9 percent decrease from the previous month and a 2 percent decrease from April 2009.
“There were two important milestones in the April numbers that show foreclosure activity has begun to plateau - but at a very high level that will not drop off in the near future,” said James J. Saccacio, chief executive officer of RealtyTrac. “April was the first month in the history of our report with an annual decrease in U.S. foreclosure activity. Secondly, bank repossessions, or REOs, hit a record monthly high for the report even while default notices dropped substantially on a monthly and annual basis. We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties.”
Business analyst John Clark at Foreclosure Support said, “For the first time, we’re seeing more foreclosure properties leave the market than new foreclosures coming on to the market.”
While most of the states with the highest foreclosure inventories in the nation, such as California, Nevada, Arizona, Texas and Florida still have large numbers of foreclosures, many of these states saw significant declines. Part of this is due to the fact that fewer new foreclosures are coming onto the market and more foreclosed homes that have been on the market for a while are getting repossessed by banks and government lenders.
“REO properties are really picking up,” explained Clark. “There are a lot of bank owned homes out there now, and there are going to be even more as the market continues to correct itself.”
But the plateau doesn’t necessarily mean foreclosures are going to drop anytime soon. The recession still plays a large role in the amount of foreclosures, especially with faltering local economies in states like Michigan, Utah, and Idaho, which appeared recently on the Top 10 foreclosure states for the first time. Other states with slowing foreclosure rates like Georgia, Massachusetts and Illinois are projected to fare better due to their thriving economies.
Of the Top 10 metropolitan area foreclosure rates, cities previously ravaged by foreclosures such as Fort Myers, FL; Orlando, FL; Stockton, CA and Modesto, CA all saw significant drops in foreclosures during April. The only city in the Top 10 to see their foreclosure real estate inventory grow was Reno, NV.