Foreclosures Almost Back to Pre-Bust Levels

It’s time for our detailed look at December foreclosure stats in King, Snohomish, and Pierce counties. First up, the Notice of Trustee Sale summary:

December 2014
King: 322 NTS, down 36% YOY
Snohomish: 195 NTS, down 27% YOY
Pierce: 298 NTS, down 21% YOY

The number of trustee sale notices was down big yet again both from last year, but edged up slightly from the previous month. Here’s the chart of foreclosures per business day. King and Pierce both increased month-over-month even after adjusting for business days, but Snohomish fell slightly:

Notices of Trustee Sale: Daily Rate

Here’s how the latest month’s weekday rate of foreclosures in each county compares to the 2000-2007 average and the highest level that was reached during the housing bust.

Daily Rate of Foreclosures

County Latest YOY ’00-’07 Max
King 14.6 -39% 13.4 73.4
Snohomish 8.9 -30% 7.0 37.1
Pierce 13.5 -24% 11.2 47.7

All three counties continue to drop double digits from last year’s levels.

Since all of 2014 is now in the books, let’s also take a look at annual stats for the three counties. Here’s how 2014 compared to recent years:

Foreclosure Notices per Year: King, Snohomish, & Pierce

In 2014 all three counties saw their smallest level of foreclosure notices since 2007—the year home prices peaked in the Seattle area. Year-over-year, the annual total of foreclosures notices was down 41% in King County, down 38% in Snohomish County, and down 44% in Pierce County.

We didn’t quite get down to the same level that we saw in the years during the housing bubble, but we’re awfully close. 2015 seems likely to be the year foreclosure levels return to their pre-bust levels.

Here’s a look at foreclosure notices and completions (trustee deeds) in just King County:

Foreclosure Notices & Completions per Year: King County

Trustee deeds in King County fell 34% between 2013 and 2014.

Here’s your interactive Tableau dashboard updated with the latest foreclosure data:

The percentage of households in the chart above is determined using OFM population estimates and household sizes from the 2000 Census. King County came in at 1 NTS per 2,598 households, Snohomish County had 1 NTS per 1,430 households, and Pierce had 1 NTS for every 1,064 households (higher is better).

According to foreclosure tracking company RealtyTrac, Washington’s statewide foreclosure rate for May of one foreclosure for every 1,530 housing units was 22nd highest 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.

Hit the jump for a larger version of the chart that shows the percentage of households in each county receiving a foreclosure notice each month:

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, hit this chart and drag the date slider to its full range. 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.

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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.

21 comments:

  1. 1

    If you look just at the trustee’s deeds, we’re still well above the pre-bust levels. The difference though is likely due to the fact that the market had not dropped for 20 years back then, so owners in financial trouble were more likely to be able to sell instead of get foreclosed.

  2. 2

    Its a New Paradigm for 2014

    “…The number of foreclosures in April fell to their lowest level since 2007 – and one reason is that lenders are getting smart.

    Instead of foreclosing on people, a costly and lengthy process, they’re increasingly using short sales to move people out of homes they can no longer afford. Short sales are not only faster than foreclosures, they often turn out to be cheaper. By forgiving part of the loan up front (a loss they would take anyway during foreclosure, lenders can get possession of a house faster and sell it before it has had time to deteriorate. Homeowners get to shed their mortgage debt faster – and with less damage to their credit rating….”

    http://www.csmonitor.com/Business/new-economy/2012/0517/Foreclosures-down-short-sales-up.-Are-banks-getting-smart

  3. 3

    RE: softwarengineer @

    Its an Older 2012 News Reference

    But based on my own foreclosure short sale process last October, its true today too.

  4. 4
    Deerhawke says:

    It would be interesting to see a map of the foreclosures and how that has changed over time.

    In 2009 through 2011 and even into 2012, you would see most of the foreclosures in South County and North County, but you would see a surprising number on the East Side and in the central neighborhoods of Seattle. I remember bidding on some units on Queen Anne.

    Recently, I have seen very few on the East Side and Seattle. Now the foreclosure activity is almost all in the North and South neighborhoods that have been lagging behind the general appreciation curve.

  5. 5
    Blurtman says:

    RE: Deerhawke @ – There had been quite a few in Sammamish after the bubble burst, but many were snatched up in the $500’s and low $600’s and are now worth much more today.

  6. 6
    sleepless says:

    I work in Kirkland, on Lake WA blvd, and we have a home across the street from my office that looks like a dump. It has been abandoned at least for two years (I have been with the company for two years now), no signs of sale, no tear down. The area all around is very prime ($1.5mm+) with the lake views and new construction, but the home still sits… I kind of wonder…

  7. 7
    sleepless says:

    RE: softwarengineer @

    a loss they would take anyway during foreclosure

    But shouldn’t mortgage insurance cover the loss. I presume if you are underwater, you should’ve been carried the mortgage insurance because of the low down payment…

  8. 8
    sleepless says:

    RE: Deerhawke @

    Recently, I have seen very few on the East Side and Seattle

    I have noticed lots of tear downs lately in west Bellevue, prime locations. I wonder how many of those were foreclosure or just old dumps. Most of them looked pretty bad before tear down.

  9. 9
    FlipperInSeattle says:

    The lack of volume has made it brutal at the King County auction lately. The level of new properties (new NTS’ – not just postpones from previous weeks) is so low that people are overpaying just to get inventory.

    It is still the usual mix – plenty of south end, but the usual scattering of stuff around the eastside. Two 1m+ properties on the list this week, some tear-downs with land values over 500, and the mix of entry-level that fuels a good part of the market. There was even a 6-plex.

    Bottom line: as I’ve said before – there have always been foreclosures and there will always be foreclosures. You never know anyone else’s math, but in general, the math isn’t as bad today as it was a couple years ago…

  10. 10
    Mike says:

    By sleepless @ :

    RE: Deerhawke @

    Recently, I have seen very few on the East Side and Seattle

    I have noticed lots of tear downs lately in west Bellevue, prime locations. I wonder how many of those were foreclosure or just old dumps. Most of them looked pretty bad before tear down.

    A lot of them are estate sales. 3 years ago was a good time to pick one up to restore and live in. Now they’re mostly developer fodder.

  11. 11
    Blurtman says:

    Here is one. That must have been some renovation for a more than doubling in less than two years. Now apparently, a foreclosure?

    Price History

    DATE EVENT PRICE $/SQFT SOURCE
    12/17/14 Listed for sale — — Auction.com
    02/02/07 Sold $772,000+151% $265 Public Record
    05/10/05 Sold $308,000 $105 Public Record

    http://www.auction.com/residential/sammamish%20wa_qs/

    ow.com/homes/for_sale/68016006_zpid/days_sort/47.613382,-122.054366,47.609556,-122.063057_rect/16_zm/1_fr/

  12. 12
    Blurtman says:

    Here is another flipper’s dream. This home was languishing on the market before it was purchased in June 2014 for $640,000. Add ze marble countertop, and ze fresh baked cookies, et voila! You pay me $200,000 more dollars. EZ money in America. And the color is hideous.

    http://www.zillow.com/homes/for_sale/70578185_zpid/days_sort/47.613389,-122.054366,47.609563,-122.063057_rect/16_zm/1_fr/

  13. 13
    Mike says:

    By Kary L. Krismer @ :

    If you look just at the trustee’s deeds, we’re still well above the pre-bust levels. The difference though is likely due to the fact that the market had not dropped for 20 years back then, so owners in financial trouble were more likely to be able to sell instead of get foreclosed.

    Or take out a sub-prime loan to tide them over through a financial rough patch. Before sub-prime became a way of life in the early aughts, it was a financial safety net.

  14. 14

    By softwarengineer @ :

    RE: softwarengineer @

    Its an Older 2012 News Reference

    But based on my own foreclosure short sale process last October, its true today too.

    During 2012 a lot of short sale activity was driven by the National Mortgage Settlement. Those funds are now gone, and the number of short sales has decreased for that reason and others.

    Understand that under the NMS the entities had to give up billions of dollars, and they didn’t really care how they did it. Well, not true–their preferred way would be to give them up on money they would never see, like short sales on underwater mortgages. I even heard a few instances of them just waiving debt and releasing mortgages without even being asked.

  15. 15

    By sleepless @ :

    RE: softwarengineer @

    a loss they would take anyway during foreclosure

    But shouldn’t mortgage insurance cover the loss. I presume if you are underwater, you should’ve been carried the mortgage insurance because of the low down payment…

    Mortgage insurance doesn’t necessarily cover all of the loss. I don’t recall the specifics of the various programs, but MI might say only cover 80% of the original loan amount, and I don’t think I recall any covering the accrued interest. And in any case, the point would still exist about the short sale getting them the funds faster.

  16. 16
    Jay says:

    Why are old sellers so annoying to deal with? Oh my gosh! We are trying to buy a house from an old couple. They are trying to get the best price out of their house, but the truth is they haven’t done any renovation to it, popcorn ceilings, broken fence, dated bathrooms, yucky carpet (they call that new carpet). Yet they are comparing their house with the one that was sold for more than $100,000 because that house got renovated very extensively. Well, we are moving on and booking the next home tour.

  17. 17

    RE: Jay @ – It’s not just “old sellers.” People in general don’t recognize deficient conditions in their own properties because: (1) They see them everyday; and (2) They simply are not being realistic in comparing their property to other properties. It’s human nature.

  18. 18

    RE: Kary L. Krismer @ RE: sleepless @

    Yes Kary

    Does it cover damage and lack of maintenance? I doubt it.

  19. 19

    RE: Kary L. Krismer @

    I Also See This as a Difference in the 2006 Listings Market to Now

    I remember back in 2006-2007 when a lot of beat up homes fetched top dollar anyway. The frenzy to buy anything before it was too late back then was totally out of control. Perhaps there is a bit more sanity today.

  20. 20
    Shoeguy says:

    RE: Jay @ – Supply and demand. If Seattle housing supply was anywhere near normal, they wouldn’t be able to get away with that crap.

  21. 21
    Jay says:

    RE: Shoeguy @ – Yep, I should just keep waiting. I can’t stand that kind of crap. Is inventory going to go up soon?

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