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More Than 430,000 Foreclosure Filings Reported in Q1 Accordi

meshugymeshugy
edited April 2007 in Seattle Real Estate
More Than 430,000 Foreclosure Filings Reported in Q1 According to RealtyTrac(TM) U.S. Foreclosure Market Report

Seattle is very low on the list:

Seattle is ranked 73 out the 100 largest areas.

We only have one foreclosure for every 464 houses.

Troubled areas like las Vegas or Sacramento have 1 foreclosures for every 50-60 houses.

Washington State is 21st on the list.

Looks like we'll be relatively untouched by the sub prime fiasco. We only have a fraction of the foreclosures of the really troubled areas.

Comments

  • snigletsniglet
    Are the foreclosure rates dropping (YoY) in Washington?

    Also, I wonder why foreclosures are rising in prime locales like Orange County and San Diego? Were there unique factors that led to declines in those markets that aren't present in the Seattle area?
  • mike2mike2
    As long as prices are increasing, the foreclosure rate isn't going to spike up. The majority of people having payment problems can refinance, take out equity and use that to pay the mortgage.

    It's not uncommon to see people in fast appreciating areas refinancing once a year - some even re-fi 2 or 3 times a year. (the overall average lately is once every 1.7 years) Granted, that's a poor long term financial strategy but it allows them to keep making payments for now.

    If you look at the people here who are in the early stages of foreclosure, you'll see alot of perpetual refinancers. As home price increases slow down, more people doing this juggling act will drop a ball.
  • synthetiksynthetik
    Seattle is just behind the housing crash by about a year, that is nearly common knowledge by now.

    DOT Com Crash and 9/11 destroyed the economy here and it took people a bit longer to get in on the real estate ponzi scheme. We'll have our time, so don't be fooled by shills who want to increase your financial hardship (and their own... are they just stupid or is there an extra chromosome that snuck in there?)

    Ballard is the slum to the future.
  • deejayohdeejayoh
    Even OC and SD have more sub-prime than Seattle. Don't expect to see much FC activity here until the Alt-A resets start. Even then, it will depend on the economy.

    Plus prices have been flat to slightly up here - so anyone who does get in trouble can generally still sell before they go in to foreclosure.

    However, to think that Seattle will be unaffected by national trend - when you have headlines pointing to the first decline in national median price since the great depression, worst drop in 18 years, etc is pretty pollyannish.
  • StevePDXStevePDX
    As reported on NPR: WA, OR, and ID are seeing foreclosure rates at 1/2 the national avg due to record levels of past appreciation. Most houses that even go into default are sold before auction. Low rates of foreclosure only evidence this past appreciation and do little to tell us where prices are heading.
  • deejayohdeejayoh
    When take a look at the list of MSAs and see where some markets show up, it's hard to say that foreclosure activity is a very good indicator of what is happening with prices. High foreclosure markets don't seem to correlate with poor price performance.

    For instance - Seattle is above SF in f/c activity - even though SF has been seeing price drops. Boston is #60 (vs. our #73) and they have been the worst performing market in the CS index. Seems a bit random.

    However, if you look at the top markets - you'll see Vegas, Phx, Riverside, Indy, Denver etc. All markets where we have been reading about tons of FRAUD. Given the lax underwriting standards of the last few years I think that is biggest thing that the FC activity shows. The presence of scammers and con artists.

    As far as health of market goes, I am not sure it proves much.
  • mike2mike2
    I agree there can be alot of other factors in foreclosure rate than just price appreciation - but price appreciation is the factor that determines whether recent buyers can borrow themselves out of a cash flow shortage.

    It IS mostly recent buyers that are going into default. This is a departure from long term trends where buyers are most likely to default around 40 months into the mortgage.

    Recent Notices of Trustee Sale for KC show that at least half of the problems are with mortgages issued in 2005 or later. These people have on average seen quite a bit of appreciation, and the only thing that would keep them from extracting equity is bad credit (or possibly denial).

    If one were to break out the foreclosure #'s by the total # of homes in the market, total # of mortgaged homes, and total # of homes with new mortgages since 2005, and # homes purchased since 2005 I'd expect that the rate would climb quite a bit between these groups.

    Low overall foreclosure numbers may not be meaningful in a market where few people own homes and those that do purchased 10+ years ago.
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