Time for our detailed look at foreclosure activity for December in King, Snohomish, and Pierce counties. First up, the Notice of Trustee Sale summary:
December 2009
King: 773 NTS, up 17% YOY
Snohomish: 417 NTS, up 41% YOY
Pierce: 523 NTS, down 10% YOY
Now that I’m turning into an expert with Tableau, I thought I’d go ahead and put our foreclosure (notice of trustee sale) data into an interactive table, as well:
The percentage of households is determined using OFM population estimates and household sizes from the 2000 Census. King County came in at 1 NTS per 1,009 households, Snohomish County had 1 NTS per 682 households, and Pierce had 1 NTS for every 656 households (higher is better).
Now that all of 2009 is in the bag, here’s a look at the last 10 years of total foreclosure notices and closed sales each year:
According to foreclosure tracking company RealtyTrac, Washington’s statewide foreclosure rate for 2009 of one foreclosure for every 78 housing units was 24th worst among the 50 states and the District of Columbia. Note that RealtyTrac’s definition of “in foreclosure” is much broader than what we are using, and includes Notice of Default, Lis Pendens, Notice of Trustee Sale, and Real Estate Owned.
Lastly, here’s a look at the raw number of trustee sale notices sent in each county every month over the last ten years. For King County the data goes all the way back to 1979, just drag the date filter on the bottom all the way to the left to view the data.
I think it’s fair to describe the current level of foreclosures as “still seriously elevated.”
Note: The graphs above are derived from monthly Notice of Trustee Sale counts gathered at King, Snohomish, and Pierce County records. For a longer-term picture of King County foreclosures back to 1979, refer to the final chart in this post. For the full legal definition of what a Notice of Trustee Sale is and how it fits into the foreclosure process, check out RCW 61.24.040. The short version is that it is the notice sent to delinquent borrowers that their home will be repossessed in 90 days.
At the Beginning of 2009, It was Clear to Me
Wait until the unemployment insurance runs out for many by years end. Its years end and Fortune Magazine (Nov 23, 2009) article called Investing stated in part:
“…56% of unemployed will never get rehired…”
This also clearly means the foreclosures will likely hit much of the ghost unemployed [no benefits, no job and no hope] that aren’t counted in the 10% unemployment rate anymore.
The ghost unemployed [and severely underemployed] are like a snow ball rolling down a mountain….it just keeps getting bigger and bigger, as time goes on. Even when the mitigated unemployment rate stays stagnant or worsens slowly.
RE: softwarengineer @ 1 – Your buddy from SE MI probably is seeing some of the people who have been receiving unemployment benefits for over 70 weeks. The other day I looked up the maximum length that someone in MI could receive unemployment insurance benefits, and it’s 99 weeks, if I remember right. It’s mainly paid by the Feds in the form of “emergency benefits,” and I suspect that there will be another extension.
The workers who were unemployed before the extended, extended, extended benefits received a maximum of 26 weeks. Imagine if your layoff was the day before those who qualify for the extensively extended benefits. You received your 26 weeks, but your coworker who was laid off the next day is still receiving benefits over a year later. (Actually, this is probably not technically true, as there was probably some extension for the other worker, but there is a cutoff point where after a given date the unemployment benefits seem to be extended into forever.)
RE: AMS @ 2 –
Speaking of Pete Murphy, Author of Five Short Blasts [2007]
Yes, this retired detroit mech engr is living in ground zero. I was just thinking of him today too, for instance, how to update his 2007 economic analyses techniques to 2009 data.
I’d love to see 2009 per capita income data [including ghost unemployed, etc] minus the top 1%….if its in the BLS quagmire, I can’t get it documented from the gov’t site….I wonder why….LOL
Pete did state on page 26 of his book, as of 2007, made it clear that the top 20% of families made about three times as much as the bottom 80%….I betcha its more like four times as much today, with horrifying snow-balling ghost unemployment factored in.
Went to a high rise Condo today in Tacoma to show 4 units. As I approached the building I saw 11 lock boxes! I thought WOW what a train wreck here. I didn’t even bother with the conventional sellers who had theirs priced 80k-120k higher for the same units. Due to the rain it was a pain to see which lock box belonged to which unit because of the smearing of the ink. Anyway, as I walked in with my Buyer to the 1st unit there was a “tasty” little Trustee Sale notice on the front door. This has become common in the last year and we both looked at the date of March 26. Anyway, as we went to the next unit sure enough ANOTHER Trustee notice taped to the door. I thought no WAY! Were not gonna be 4-4 are we? These babies are already down from 280k to 170k. With the 300 dues it wouldn’t surprise me though. Anyway, we approached the 3rd unit with anticipation………..But, alas…
The last 2 units didn’t have Trustee notices……………………….. YET……………… but 50% of the ones I showed surely did……………..What does this mean?………What could I possibly be implying?……………..What do we learn from Ray’s wet Condo search?
They are all coming back……………… Its not a matter of IF ……………just when.
RE: Ray Pepper @ 4 – Near/on the Thea Foss Waterway, maybe? There sure are a lot of problems in that recently revitalized area.
Question for Ray “They are ALL coming back” Pepper. If one believes prices are still falling, but one’s wife is insisting on buying a house in 2009, come hell or high water, where do you find the best Gems in Seattle? Short sale or bank-owned? I would assume it would be a home that needs some cosmetic work, so as to better exploit pricing inefficiencies? Certain neighborhoods?
By cc12 @ 6:
I think you may have missed the window of opportunity on that one…
RE: The Tim @ 7 – Seattle Police Department Reports, “Deceased dog’s condition upgraded to alive”
http://spdblotter.seattle.gov/2010/01/12/deceased-dogs-condition-upgraded-to-alive/
(Father time is not so easy to fool, however.)
I just went to Trulia and checked the foreclosures and I saw a house my husband and I had our eye on. It was for rent for 2 k a month which was a bit steep for us as far as rent goes. It was for rent in August so the property must have already been in trouble. I’m glad we had not rented it, it probably would have been foreclosed on while we were renting. The auction price is still really high near 600k. The original price was 650K. The price the bidding is starting at seems really high for an auction price the house is an old Ballard house with charm but it would need work. We really wanted to buy it but not at that price it really is not worth that much. Someone will probably buy and tear it down for a new place. Why are auction prices so high? I thought they wanted to get rid of the houses on the books.
RE: Urban Artist @ 9 – “Someone will probably buy and tear it down for a new place.”
How much new construction is going on these days?
“Why are auction prices so high?”
The lender can bid what’s owed without any problem. There’s probably little chance of collection on any deficiency.
“I thought they wanted to get rid of the houses on the books.”
It’s what all sellers want: They want high prices and to sell right away. Not to many sellers want to sell for low prices, so the waiting game begins. Lenders don’t want to own houses, but they don’t want to realize heavy losses. What’s a lender to do?
It is true I don’t see a lot of construction but Ballard seems to be having more construction done than other areas. So in Ballard I would not be surprised to see a new house go up. So what happens if the price is not met at an auction? Do they try again later? Do they take the highest bid they do get? Or does the property go back to the lender for awhile. We really like the house but we will have to catch it when the price is a better match to the condition of the property, which is a fixer.
I find it interesting that the counties’ ratio of foreclosure notices has been quite different than the ratio of home sales over the last 10 years. Though King has vastly more sales, it doesn’t have vastly more foreclosure notices.
By the ratio metric, you might say that 2009 is the year where foreclosures most closely matched sales!
I do notice that the inventory is going down in east side, Bellevue particularly. It may be a different story in Tacoma like Ray said. But if you have a house in a decent neighborhood in the east side and you are not asking for the moon, it will be sold quickly.
By seattle @ 13:
I’ve tried to buy 3 houses on the east side in the past month. The first one had 12 offers on it when I saw it on the second day on market. The second one I saw the first day on market and I was one of 4 offers. The buyer ended up paying 6% over the comps in the neighborhood for the house. The last house ended up being a multiple offer scenario that I backed out of once I realized this was pointless. Houses will sell as long as you price them at market value. 90% of the houses out there seem to be 15-20% higher than the comps say they should be and the sellers refuse to come down to market price no matter how much evidence you show them.
It’s at the point that I’m considering new construction just because it would be a lot less hassle.
Wasn’t there a moratorium on many foreclosures last December? If so, the YOY numbers are suspect.
RE market in Seattle area is certainly rebounding regardless of what your statistics says. The sales are very local. Certain pockets are doing very well – Bellevue, Sammamish, Issquah, Queen Anne etc are doing very well. Less desirable areas have a much more inventory. You just can’t generalize.
RE: Urban Artist @ 11 –
When a house goes up for foreclosure auction, the opening bid is the amount owed on the house plus penalties.
In many cases, the amount owed is more than the house is worth, so the lender “buys” the property at the auction, since there were no other bidders. The house then becomes an REO (lender owned) property, and is sometimes later put on the market, though at other times it’s not put on the market. Nobody’s really sure about exactly how much property that lenders have repossessed that they’re just holding onto, the shadow inventory.
There are some great deal to be had at the foreclosure auctions, but also a lot of property where the opening bids are higher than the value of the property, and others where people inexplicably get into bidding wars, driving up prices to way over market value. There are downsides to buying at auction. One is that you either need all cash, or have to make arrangements with one of the short term, high interest foreclosure specialty lenders. You also generally can’t get into the home prior to auction.
RE: Maria @ 16 –
You are commenting on a post about foreclosures.
Well, yes, people may be paying a whole bunch of money for properties today, and they may even bid against each other at today’s extremely high prices.
There is a growing fear though that if prices do decline in the next few years many of these new purchases of today will the the foreclosures of tomorrow.
By Maria @ 16:
But you just did generalize by saying that the RE market in Seattle is certainly rebounding. I’m not disagreeing with you that some areas are doing much better than others locally, but it just seems like you might be trying to justify your beliefs. Maybe you just bought a house in an area “doing very well” or maybe you’re a real estate agent?
So, Bank of America is about to start releasing homes back into the market. Pay attention, Ray- this is for Nevada, but there’s lots of other interesting info about the number they hold, backlogs, etc:
http://www.lvrj.com/business/bank-of-america-to-release-homes-81453352.html
“Throughout the country, estimates of homes being taken back by Bank of America range from 11,000 to 14,000 a month in the early part of this year to 29,000 to 35,000 by November and December, said John Ciresi, vice president and portfolio manager for Bank of America in Towson, Md.”
RE: @ –
How can people read this sort of stuff and think the market isn’t going to get much worse? This lull in falling prices will prove to be a major bull trap taking the equity of thousands and thousands of recent buyers as we move forward through the next several years.
RE: Scotsman @ 20 –
I don’t know where you find this stuff, but this article is a good read.
You would have to be brain dead to trust any one of these bankers or Real Estate Professionals pushing short sales. If you bought an REO will you be paying fifty cents on the dollar? How about thirty five cents?
Why are we rewarding banks for the bad business decision they made? If they made the loan that’s their business. Why bail them out by paying the price the bank, or better yet, the investors want?
Find something else to do, and if you have to buy something buy a better pair of shoes.
RE: seattle @ 13 –
Agreed! I have 3 homes closing in Bellevue this month. Each time we were the 1st in but with multiple offers in back-up. Bellevue is RED HOT and the short sales and foreclosures get TREMENDOUS interest.
RE: David Losh @ 22 – “I don’t know where you find this stuff…”
I know you might find this amazing, but he finds it on the Internet!
Where else?
RE: David Losh @ 22 –
David- you can subscribe to programed searches that will send (daily) links containing groups of words or phrases that might be of interest. I also have 30-35 sites that I visit daily where I know others will be looking for and discussing the issues that interest me. I also look at a huge amount of government data, but it doesn’t transfer well to a site like Seattle Bubble, and is probably only of interest to hard core geeks. Even I prefer to read other’s summaries, although I’ll do “do the work” when it’s relevant to issues I’m working on. One thing is for sure- it’s a big, fast paced world out there, with a ton of people looking at all sorts of issues. How fortunate we are to have the internet and all of the communities and information it can bring.
RE: seattle @ 13 –
I can’t help but think that we are in the calm before the storm. A storm far more vicious than than the first. The banks are insolvent if they were forced to mark their assets down to the true value…yet they’ve continued to pay themselves like kings.
When Round 2 of bailouts are needed, I highly doubt that Congress or the People are going to tolerate more capital infusions.
That will lead to a major financial disaster led (and followed) by a number of foreclosures that many could never have imagined, especially in non-recourse states like CA and AZ. Washington has slightly better laws for the banks, but it won’t be enough to stop people from walking away.
RE: Ira Sacharoff @ 19 –
Or Maybe She Needs Her Property Assessment done by Another Appraiser
Hire the kind that you use to lower your property tax [they include the lower foreclosure type data] for court, not the kind working to get the lender to approve the bad loan….LOL
RE: Scotsman @ 20 –
I Found a Similar Article for California a Few Days Ago
The much lower cash offers from investors are killing 1st time home buyers trying to buy on debt.
Sure sounds like the banks are rolling in cash….LOL
In a related issue, when I paid off my BECU mortgage principle earlier this year, the bank didn’t have a reasonable clue about the legal documents needed, how to request them or get this, how to do an electronic transfer to complete the transaction….I had to scream and kick to even get a 1-800 phone number from BECU to phone the mortgage company for paperwork explaining the convoluted process that only a good real estate attorney might be able to clearly comprehend….my time limit to get the electronic transfer out by the time I got the convoluted package was like 48 hrs too.
Really sounds like banks want you withdrawing large amounts of money to pay off loan principles….LOL
RE: softwarengineer @ 28 –
Earlier in 2009, not this year, 2010
RE: Packet @ 14 –
You don’t build a house to avoid “hassle.”
RE: softwarengineer @ 28 –
“The much lower cash offers from investors are killing 1st time home buyers trying to buy on debt.”
I heard the same from the cab driver when I was at a convention in Vegas in November. His family ( 5 kids and a wife ) had been shut out of the market due to the bubble for years and now he could afford a modest home but only a distressed property with FHA. He had given up after a year of being denied by the sellers ( banks ) since accdording to him the ranking goes like this:
1. Cash offers
2. A minimum of 20% down.
3. FHA.
Personally I can’t really understand why since I would think a check is a check of cash independent of where the financing comes from as long as it’s not from the same bank as is selling the property. Anyone who can explain?
RE: Groundhogday @ 30 –
I’m not building a custom house. I’d be buying in a new development.
I tried to put in an offer on a house this morning that I had seen previously and apparently they had received a full price offer. This is in Renton but Issaquah school system. Comps seem to be $137-$158/sq ft yet this place just went in the $160s. An REO a couple blocks over is at $150/sq ft but close to 128th and loud enough that you can hear the traffic inside the house. Yet talking to the agent, they have multiple offers and it looks like it’s going to close at or above ask.
I seriously hope we return to a rational market after this tax credit nonsense goes away…