RealEstateEconomyWatch.com

Yesterday’s announcement that a West Coast venture capital firm has made a major investment in RealtyTrac, the national foreclosure database, should be good news for the housing industry and for policy makers, who have come to rely upon RealtyTrac data for understanding the foreclosure marketplace and formulating public policy.

Though it doesn’t cover quite cover the entire country, it still reports foreclosure cats from some 2200 counties. Obtaining, assembling and displaying that data is an expensive undertaking because it must access a variety of sources other than multiple listing services, which list fewer than 20 percent of foreclosures are listed. No one else comes close to the combination of coverage and credibility that has made RealtyTrac a household word in the past five years.

Like many subscription-based Web sites in the housing sector, times have not been good for RT. It has been cutting costs and personnel, and several months ago parted ways with its long-time public relations firm, Atomic Public Relations. The recent departure of Rick Sharga, RealtyTrac’s highly effective spokesman, added to the impression, whether true or not, that times are tough.

In fact, times will soon get even tougher in the foreclosure business. Though it’s hard to tell from today’s depressed home prices and still-healthy foreclosure inventories, delinquencies and defaults are down significantly on a year-over-year basis and will continue to decline barring another downturn in the economy. Tougher lending standards that were put in place beginning in 2007 are creating a growing pool of lower risk mortgages and borrowers less likely to default. Someday within the next several years, the Foreclosure Era will wind down. Never again should foreclosures reach the level of a million or more a year that we are still enduring.

In its news release yesterday, the new owner, Renovo Capital LLC, promised to provide the capital necessary to fund growth, nurture expansion into untapped areas of the market, and continue the company’s mission of dramatically improving the overall experience of transacting real estate.

“Moving forward, RealtyTrac will focus on expanding its data collection capabilities and footprint while constantly improving the user experience on the nation’s leading foreclosure website, www.realtytrac.com, and developing innovative new products to enhance RealtyTrac’s value proposition for individuals, investors and real estate professionals,” said the announcement.

These are excellent goals. We hope the new management’s priority list also includes a commitment to continue the special role RealtyTrac has played educating the nation about the foreclosure crisis. For a period several years, if not more, foreclosures will continue to play a major, though diminishing role, in the real estate economy. As much as ever, we will need RealtyTrac to help us through it.