Foreclosure Inventory Decline Lags Behind Historic Norms
Albeit by single percentage points the nation’s foreclosure inventory continued to decline in November thanks to short sales and high distressed property absorption rates. Improvements, however, lag behind historic norms.
The November 2012 CoreLogic National Foreclosure Report, which provides data on completed U.S. foreclosures and the overall foreclosure inventory, shows the number of completed foreclosures in the U.S. dropped 6% month-over-month.
While down from 59,000 to 55,000 in November the decrease indicates a change of pace compared to the 9% monthly decrease reported in October 2012.
The improvement is more significant on a year-over-year basis as compared to 72,000 in November 2011, the number of completed foreclosures in the same month of 2012 decreased 23%.
Also, year-over-year, the foreclosure inventory was down 18% compared to 2011.
Anand Nallathambi, president and CEO of CoreLogic, credited year-over-year improvements in the pace of completed foreclosures, to short sales as a disposition method that gained popularity in the past couple of years.
Month-over-month the national foreclosure inventory—the share of all mortgaged homes in any stage of the foreclosure process—was down 3.5% from October 2012 to November 2012.
Approximately 1.2 million homes, or 3% of all homes with a mortgage, were in the national foreclosure inventory as of November 2012 compared to 1.5 million, or 3.5% in November 2011.
According to CoreLogic’s chief economist Mark Fleming, thanks to its “ongoing ability to absorb the distressed sales that result from completed foreclosures," the housing market is seeing continuous declines of the inventory of foreclosed properties.
CoreLogic reports that since the financial crisis began in September 2008, there have been approximately 4 million completed foreclosures across the country, which bears no comparison to historic norms.
Before the housing market crash, between 2000 and 2006 the number of completed foreclosures—the total number of homes actually lost to foreclosure—averaged 21,000 per month.
Recent history also shows persistent performance from the top five worst performing markets that continue to account for 50% of all completed foreclosures nationally.
The five states with the highest number of completed foreclosures for the 12 months ending in November 2012 were California 102,000, Florida 94,000, Michigan 75,000, Texas 58,000 and Georgia 52,000.
At 10.4% Florida also remains the state with the highest foreclosure inventory as a percentage of all mortgaged homes.
It is followed by New Jersey 7.3%, New York 5.1%, Nevada 4.7% and Illinois 4.7%.
These data indicate a positive trend that still is “a long way” from returning to historic norms, Nallathambi added.