Foreclosures Continued to Increase in October

Here’s your October update on Foreclosure activity in King, Snohomish, and Pierce counties. First up, the Notice of Trustee Sale summary:

October 2008
King: 643 NTS, up 82% YOY
Snohomish: 331 NTS, up 128% YOY
Pierce: 603 NTS, up 84% YOY

The graphs below 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 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.

First let’s look at the number of Notices of Trustee Sale scaled in terms of number of households per foreclosure (based on household data for each county from the American Community Survey, assuming linear household growth between surveys):

Households per Foreclosure

King County came in at 1 NTS per 1,211 households, down from 1 per 2,169 in October 2007 and 1 per 1,281 in September 2008. Snohomish County had 1 NTS per 789 households, down from 1 per 1,784 in October 2007 and 1 per 882 in September. Pierce broke below the 1 NTS for every 500 households barrier, coming in at 1 per 489, down from 1 NTS per 891 households a year ago and 1 per 549 a month ago.

For comparison, the latest press release from RealtyTrac—whose definition of foreclosure includes Notice of Default, Auction, Notice of Trustee Sale, and Real Estate Owned— shows King County with 1 foreclosure for every 652 housing units, Snohomish at 1 foreclosure for every 445 housing units, and Pierce with 1 foreclosure for every 236 housing units. Their report puts the nationwide rate at 1 foreclosure per every 452 housing units, and Washington’s statewide rate at 1 foreclosure per every 631 housing units.

Following are charts of King, Pierce, and Snohomish County foreclosures from January 2000 through October 2008, with uniform y-axis scales to provide easier comparison. Click below to continue…

Notices of Trustee Sale - King

Foreclosures shot up again in King County, reaching their second-highest level ever, still short of July’s level of 730.

Notices of Trustee Sale - Snohomish

Similar story in Snohomish County, where October’s 331 NOTs were just barely shy of the record 355 set in July.

Notices of Trustee Sale - Pierce

Down in Pierce County they easily set another new record, with October coming in with over 10% more foreclosures than July, the previous record month. Ouch.

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

25 comments:

  1. 1

    Can you graph the foreclosure rate as a % of households in foreclosure. I know the households per foreclosure rate is an interesting metric of loading, but the differences between levels is hard to conceptualize. Moving from 2500 to 1500 is not nearly as big a deal as moving from 1500 to 500, for example.

  2. 2
    vboring says:

    Any idea how these Households/NTS numbers stack up to our California counterpart?

  3. 3
    The Tim says:

    Consultant Ninja @ 1: Ta-da!

    Vboring @ 2,
    Per RealtyTrac –
    All of Washington: 1 foreclosure per 631 housing units
    All of California: 1 foreclosure per 231 housing units

    Can’t give you a county-to-county comparison since the RealtyTrac page for California stats hasn’t updated to the October data yet.

  4. 4

    I WAS CRITICIZED ON THIS BLOG IN 2005 FOR BEING A DR DOOM WARNING THAT FORECLOSURES WILL DRAMATICALLY WORSEN SOON

    Where’s the apology to me, lol.

  5. 5
    vboring says:

    Percentage of households in foreclosure is definitely a more intuitive way of talking about things.

    Foreclosures as a percentage of listings might be a better predictor of price declines, though.

  6. 6
    Steve Tytler says:

    Tim,

    I know it would be a lot more work for you, but you really need to show a graph of the late 1970’s through 2008 to put the current foreclosure rate into perspective.

    The last time we had a large number of foreclosures in this area was the late 1980’s and early 1990’s … so only going back to the year 2000 does not really tell us if the recent uptick in foreclosures is any worse than it was in other “down” real estate cycles.

  7. 7
    The Tim says:

    Steve, as mentioned in the post above:

    For a longer-term picture of King County foreclosures back to 1979, refer to this post.

  8. 8
    Steve Tytler says:

    whoops .. my bad.

    That’s what I get for skipping to the charts!

    Please delete my previous post since you already covered it.

    Thanks!

  9. 9
    jonness says:

    Pierce County has got to go underwater hard-core in the near future. This place had almost as much high-interest loan exposure as CA. I figure a few more months of this recession will do wonders for price affordability there. Once it goes belly-up, the rest of WA will follow.

    Software Engineer: I’m sorry people criticized you for using your brain in 2005. Stop doing that, and you’ll fit in to the rest of the world just fine. Take criticism as a compliment, as you’ll miss it if it ever goes away.

  10. 10
    Sniglet says:

    I know it would be a lot more work for you, but you really need to show a graph of the late 1970’s through 2008 to put the current foreclosure rate into perspective.

    The last time we had a large number of foreclosures in this area was the late 1980’s and early 1990’s … so only going back to the year 2000 does not really tell us if the recent uptick in foreclosures is any worse than it was in other “down” real estate cycles.

    The standard statistics of inventory, sales, and foreclosures are woefully inadequate in helping us get a true historical perspective of what is happening today. To really compare this downturn to past ones we would need to look at the percentage of home-owners who have no equity or exotic mortgages (e.g. option ARM, neg-am, zero down, etc). Unfortunately, I don’t think such data is available.

    Nevertheless, we know that borrowing requirements NEVER got as loose as they have been in the new millenium even back in the booms of the last 40 years which makes a strong case for stating that there are higher percentage of over-extended Seattle area home-owners than at any other time in modern history.

  11. 11
    Ray Pepper says:

    Everyone better go see the WOLF lodge South of Olympia before it gets closed down. Look at the PPS! GOOD LORD! 200-300 a night? In this economy? Not even my old friend can help this stock ……………………….http://www.rallymonkey.com/oldvideo.phpp

    Just built at the wrong time!

  12. 12
    patient says:

    Are these new NTSs reported per month or are they “active” NTSs as of end of month indendent on when they are issued? Could you for example sum the months and get a picture of the yearly NTS rate?

  13. 13

    Wow! Thats a crazy graph! What percentage of these foreclosures are caused by ARMS? I am a Vancouver real estate agent and in Canada ARMS were never allowed.

  14. 14
    The Tim says:

    patient @ 12,

    These are new NTSs reported each month. They are recorded with the county based on their file date, and the monthly total includes all new NTSs filed in that particular month.

  15. 15

    This mess is just getting started.

  16. 16
    Alan says:

    Ardell has called the bottom of the market over on raincityguide.

  17. 17
    obelus says:

    The RE I was dealing with recently implied that prices were not going down much more if at all, when I said I was going to wait a bit longer.

    Buy, buy, please pleasessssse buy now!

  18. 18
    deejayoh says:

    Ardell has called the bottom of the market over on raincityguide.

    to be fair, she called the bottom as 15% off where we are today – at the late 04/early 05 level. That’s 30-33% off peak.

    I’m inclined to agree with her. At that point, Price:Income and Price:Rent ratios will be back in line with historical norms. Prices may over adjust a bit – but I think most of the risk will be out of the market.

    But of course, I am having lunch with Sniglet today – so maybe I will come back as a “super bear” :^)

    She has good intuition and she is much more willing to put her opinion out there than any of her counterparts. Doesn’t hid behind the “unknowable”

  19. 19
    johnnybigspenda says:

    Here is a great video…. I’m sure the Tim can relate to him.

    Say what you will about Peter Schiff –- self-promoter, etc. – but he nailed the current crisis first, best, and most lucidly. And, to his credit, he got out in public saying it over and over again, despite harsh skepticism sent his way. As PE Wire said this morning, this may just be the video of the year.

    http://www.youtube.com/watch?v=2I0QN-FYkpw

  20. 20
    Sniglet says:

    Say what you will about Peter Schiff –- self-promoter, etc. – but he nailed the current crisis first, best, and most lucidly.

    Really? It seems that he has been completely off-base in his view that commodities and foreign/emerging markets would be going gang-busters even while the US tanked. His predictions for a crashing US dollar haven’t worked all that well either.

    Mike Shedlock, over at http://globaleconomicanalysis.blogspot.com/, has been far more accurate in his analyses. Of all the analysts I read I think the all-star award goes to Bob Prechter. He is about the ONLY person who has been calling for deflation over the last decade. Even the bears believed we were headed towards hyper-inflation and currency destruction.

  21. 21
    Joel says:

    Price:Income and Price:Rent ratios

    Price is important to look at, but you always seem to leave out supply as a factor.

  22. 22
    TJ_98370 says:

    Front page headline news about real estate was a lot different a year and a half ago……..
    .

    Kitsap County Home Values: What Went Up Has Now Come Down
    .

    If you bought a home in Kitsap County in 2006 or 2007, when prices peaked, there’s a one in three chance you owe more on your mortgage than your home is worth today.
    .
    That somber conclusion comes from online real-estate service Zillow.com.
    .
    It also says home values in Kitsap have fallen 12 percent since the spring 2007 peak, and are at 2005 levels now, for a median value of $277,724……

    .

  23. 23

    A lot of us are influenced by who we hang out with. I know Dan from a completely different issue, and know him to be a great guy, a smart guy, and a good hearted guy. But I’m not sure about those street toughs he’s hangin with.

  24. 24
    Jackson Wallace says:

    regardless of whatever these charts say, if the powers that be start accepting that we are entering a depression – Merill Lynch, Soros, UK’s finance minister etc have all said that in the last week, then houses will go down to those magic price levels of the distant past, 100k in Seattle. Of course, the video game industry is doing well, cheapest way for unemployed people to waste time, tech layoffs are not yet nearly as bad as they were in the 2001, and the NW isnt in a drought and burning up like CA so we’re still gonna get an inflow of refugees from the rest of the country. We shall see.

  25. 25
    deejayoh says:

    Price is important to look at, but you always seem to leave out supply as a factor.

    Sorry, I don’t get your point. What about supply as a factor are you trying to point out?

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