Driven by an increase in bank repossessions, 125,875 properties faced some form of foreclosure activity in April, representing an 18-month high, according to RealtyTrac’s U.S. Foreclosure Market Report.
April’s foreclosure property count marks a 3 percent jump from March and a 9 percent leap from a year ago, but RealtyTrac Vice President Daren Blomquist emphasized that it’s a lagging indicator and a consequence of past foreclosures moving through the pipeline, not an indication of a current housing turbulence.
RealtyTrac’s definition of foreclosure activity encompasses default notices, scheduled auctions and bank repossessions (REOs). At 45,168, the number of REOs in April was up 25 percent from the previous month and up 50 percent from a year ago to a 27-month high. The spike in April REOs, however, is still 56 percent below the peak of 102,134 REOs in September 2013.
“The REO increase in April was foreshadowed by a 23-month high in scheduled foreclosure auctions in October 2014,” Blomquist said in a statement. “Many of those scheduled auctions are now taking place, and properties are going back to the foreclosing lender.”
“While distressed sales typically have a stifling effect on the housing market, in this particular market an influx of distressed inventory could actually help stimulate sales during the spring and summer buying season as new listings become available, often in the middle to lower ranges of the market,” Blomquist added.
Both foreclosure starts and the number of homes scheduled for foreclosure were down in April from the previous month and year. At 51,773, starts were down 3 percent from March and 5 percent from last April; at 46,777, scheduled foreclosures were down 8 percent from March and 5 percent from a year ago.
Nationwide, the average sale price of REOs sold in the first quarter was 87 percent of the average estimated market value of those same properties at the time of sale. Some markets saw REOs sell at a much higher price-to-value ratio, including San Diego (100 percent), Charlotte, North Carolina (100 percent), San Francisco (97 percent), Bakersfield, California (97 percent) and Portland, Oregon (97 percent).
Markets where REOs sold for the lowest price-to-value ratio in the first quarter were East Stroudsburg, Pennsylvania (62 percent), Akron, Ohio (66 percent), Atlanta (70 percent), Cleveland (70 percent) and Baltimore (74 percent).
REO properties that sold in the first quarter sold an average of 243 days after being repossessed via foreclosure, down from an average of 300 days for REOs sold in the fourth quarter of 2014 but up from an average of 226 days from the same quarter a year ago.
Following the national trend that resulted in a 27-month high of REOs in April, 33 states posted a year-over-year increase in REOs in the first quarter, including Florida (up 42 percent), California (up 53 percent), Michigan (up 198 percent), Illinois (up 46 percent) and Ohio (up 63 percent).
