The number of foreclosures filed during the first quarter of 2012 has dropped by 2% on the previous quarter, and by 16% from the same period 12 months ago, according to a new report just released by Realty Trac.
The latest RealtyTrac report defines foreclosure filings as bank repossessions, default notices and schedule auctions.
RealtyTrac stated that foreclosure filings are now at their lowest level since the last quarter of 2007, with just one in 230 US homes receiving a foreclosure notice. However, while the figures are promising, analysts are urging caution, reminding us that there is still a significant backlog of foreclosures to get through before we can really start to see some progress.
Brandon Moore, CEO of RealtyTrac, explained that the decrease in foreclosure activity will soon be reversed:
“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated. There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March.”
“The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity.”
Non-Judicial Foreclosure States Keep Figures Down
According to RealtyTrac, one of the biggest factors for the continuing decline in foreclosure filings was the decreasing activity in states that use a non-judicial foreclosure process, which accounted for 329,854 foreclosed homes. Twenty of these twenty-four states registered year-on-year decreases, including the foreclosure “hot spot” of Nevada (62% decrease) and Arkansas (79% decreased).
For states that use a judicial foreclosure process, foreclosure filings actually increased. These 26 states accounted for 243, 074 foreclosures, and saw activity increase by 8% over the last quarter, and 10% over the last year.
Foreclosure Starts Growing
Despite the fact that foreclosures are down overall, ominous signs loom overhead, as RealtyTrac points to the fact that first-time foreclosure starts have actually increased month-on-month over the first quarter. March saw the number of foreclosure starts hit 100,000 for the first time since November last year.
Nevada, which conversely saw a decrease in overall foreclosure filings, nevertheless saw foreclosure starts jump by 153% in March, closely followed by the states of Utah (103%), New Jersey (73%) and Maryland (53%).