Foreclosure percentages (Nonscientific)

[david_mcmanus]

So I was playing around on trulia.com this morning and wondered if I could actually determine foreclosure rates around here and in various other cities by simply taking the number of listings from a city search and then checking 'Foreclosure' within that same search to obtain the number of those.

Interesting results to say the least!

Tacoma - 507 foreclosures / 2090 listings --> 24.26%
Renton - 132 / 693 --> 19.05%
Kent - 144 / 760 --> 18.95%
Everett - 163 / 1086 --> 15.01%
Seattle - 409 / 3214 --> 12.73%
Shoreline - 24 / 204 --> 11.76%
Kirkland - 52 / 630 --> 8.25%
Bellevue - 48 / 617 --> 7.78%
Snohomish - 38 / 523 --> 7.27%
Bothell - 52 / 746 --> 6.97%
Mukilteo - 9 / 148 --> 6.08%

Other U.S. cities:

Los Angeles - 4702 / 7998 --> 58.79% !
Las Vegas - 11999 / 21472 --> 55.88%
San Diego - 5482 / 10153 --> 53.99%
San Francisco - 519 / 1931 --> 26.88%
Phoenix - 7552 / 15538 --> 48.60%
Dallas - 1551 / 6586 --> 23.55%
Atlanta - 3491 / 15068 --> 23.17%
New York, NY - 55 / 9140 --> 0.01% !

Does anyone know what the normal rate of foreclosure is in a normal market?

[david_mcmanus]

I'm wondering how often I should update these percentages. Weekly, Bi-weekly, Monthly?

[Ubersalad]

I wouldn't put any weight on these at all...as they are heavily skewed.

[david_mcmanus]

Skewed how? Doesn't Trulia just pull from the MLS and show properties available for sale? Or are these special Trulia listings?

[jjl]

Trulia pulls public notices of trustee sales to produce their data. Keep in mind that these are just people that are "late" on their payments, not necessarily "in foreclosure".

[ira s]

I don't know where you're getting your foreclosure stats. If it is from the notices of public sale,then that might indicate something but it's not an accurate stat vis a vis foreclosures...Locally, there are two places where foreclosure auctions are held: King County Administration Bldg, and another place next door to the Factoria Cinemas, both 10 AM Fridays...By the time the auction arrives, the vast majority of homes on the list don't make it to the public sale at all, and the owners have found some way to stave off the wolves for another day...Everything else is not actually a foreclosure...True foreclosures? Off the top of my head( based on recent visits to those auctions), I'd say in King County probably not more than 50 per month total.

[david_mcmanus]

[jillayne]

"Foreclosure percentages." We need to break down the word "foreclosure" into different catagories in order to come up with meaningful stats.

Homes in Default =
Homeowner has missed a payment or two but the lender has not yet filed a Notice of Trustees sale. There is no public records data avail for defaults in WA state because the notice of default is not recorded. Banks might release national stats but that is not helpful if can't confirm the numbers.

Next tier:
Homes in PRE-foreclosure
This is when the lender has filed a Notice of Trustee's Sale. This IS a public records document. This means the clock is ticking and very soon, the trustees sale will happen. Easy stats to obtain through your local title insurance company.


FORECLOSED homes
Also known as REOs. There were no bidders at the trustee's sale so the home was deeded back to the lien holder. These are the bank-owned homes. Sometimes people refer to these as foreclosures so you see how confusing this might get if we lumped all of them in together and tried to get meaningful stats?

Here is what would be good to know:

Percentage of bank-owned, REOs compared to total listings. I believe these stats are available and have been published for other states. I think San Diego is in real trouble here.

Percentage of homes in PRE-foreclosure compared to total number of listings. This would show us a trend here locally that might let us predict a rise in future foreclosure rates and future price declines.

Percentage of homeowners in default (and likely heading toward foreclosure.) These numbers are reported by the banks to their regulators. Statistics are released by trade organizations on a regular basis such as the Mortgage Banker's Association as well.

I am not a member of the MLS but it wouldn't be too difficult to do a keyword search in any market area to determine what's going on. Keywords: short sale, subject to lender approval, pre-foreclosure, and so on. There have been some blog posts written locally where we came up with a list of these key word phrases.

Hope that helps!

[garth]

I read in the journal the other day that 40% of sales in Vegas and San Diego the last few months were foreclosures.

The main number used as "foreclosure filings" in the press is the number of homowners 30 days behind on their mortgage. The % of these filings that become an actual bank sale depends on the health of the local housing market and available credit vehicles available to distressed homeowners. They report the number as a 1 filing for every x number of houses.

For example numbers from:

RealtyTrack Seattle (King and snohomish counties)
September 2007 one filing for every 1,294 households
http://seattlepi.nwsource.com/business/ ... ure11.html
February 2008 one filing per 1,450 households
March 2008 one filing per 1,194 households
http://seattlepi.nwsource.com/business/ ... ure13.html

Current national rate is one per 557 households.
Current rate in Nevada is one per 165

david_mcmanus's trulia numbers seem at least as good as the stupid realtytrac numbers, which like all real estate data seems to be warehoused by the company profiting from the marketing of the listings.

Looking at what has happened in the rest of the country, even if prices stay level in seattle, there still should be a shakeout affecting highly leveraged "investors" with short term ARM's and multiple properties, as they have difficulty replacing their expiring financing. A second house is sold at forclosure much faster than a primary residence, so if seattle is chock full of investors we should see soon.