Foreclosure starts fell sharply in California and Arizona from July to August, and were up only slightly in Nevada, "putting a nail in the coffin" of theories that there will be a wave of foreclosure sales after the election, according to public records aggregator ForeclosureRadar.
ForeclosureRadar, which tracks properties through the foreclosure process in five Western states, said foreclosure starts were down 23.6 percent in California from July to August, to 16,590. That represented a 49.1 percent decline from a year ago.
Notice of trustee sale filings — the final notice homeowners receive before a sale — were also down 9.8 percent from month to month, to 15,386, a 36.9 percent drop from a year ago.
Although 5,929 California properties went back to banks as "real estate owned" (REO) in August — a 30.3 percent increase from July — that represented a 46.7 percent drop from a year ago.
Sales to third-parties were up 14.45 percent from July, to 3,755, about the same level as a year ago.
Banks repossess homes when there are no bidders at a foreclosure auction willing to pay the opening bid set by the bank. In August 2011, banks took back nearly three times as many properties (11,116) as they sold to third parties (3,850). The ratio of REOs to third-party sales has shrunk considerably since then. For every five California homes banks repossessed last month, they sold roughly three to investors at auction.
California foreclosure outcomes
Right-click chart to enlarge. Source:ForeclosureRadar.
The picture looked similar in Arizona, with notice of sale filings down 16 percent from July to August, to 4,576. That represented a 42.2 percent decline from a year ago.
Banks took back 2,725 Arizona homes into their REO inventories, up 24.4 percent from July but a 10.9 percent drop from a year ago. Sales to third parties fell 14.2 percent from July, to 1,398, a 16 percent decline from a year ago.
Arizona foreclosure outcomes
Right-click chart to enlarge. Source: ForeclosureRadar.
In Nevada, ForeclosureRadar tracked 1,984 notices of default in August, about the same as July but a 68.7 percent drop from a year ago. Notice of trustee sale filings climbed 18.7 percent from July, to 1,545, but were down 56.9 percent from a year ago.
Banks repossessions were down 6.8 percent from July to August, to 372, a 79.3 percent drop from a year ago. Sales to third parties were down 28.5 percent from July, to 308, a 60.7 percent decline from a year ago.
Nevada foreclosure outcomes
Right-click chart to enlarge. Source: ForeclosureRadar.
In Oregon, notice of trustee sale filings totaled 83, an 80.6 percent drop from July to August and a 93.9 percent decline from a year ago.
Washington state bucked the overall trend, with notice of trustee sale filings up 34.9 percent from July to August, to 3,469. That represents a 48.2 percent increase from a year ago.
"We continue to see reports that there will be a wave of foreclosure sales after the election or at the start of the year," ForeclosureRadar CEO Sean O’Toole said in a statement. "The lack of foreclosure starts this month puts a nail in the coffin of this theory. There will be no wave of foreclosures for at least five months. The good news for investors and first-time buyers is that foreclosure sales have at least remained flat, continuing to provide some opportunities in the meantime."
