Foreclosures Causing A Drag On US Real Estate Recovery

Despite signs of recovery in the US housing market — including the recent increase in the housing starts — a steep rise in foreclosures is generating doubts about …

Despite signs of recovery in the US housing market — including the recent increase in the housing starts — a steep rise in foreclosures is generating doubts about the real estate market’s recovery. In fact, the number of foreclosures in the US is continuing to rise as unemployment is peaking and the consumer sector is becoming more of a drag on the economy. The following article from Property Wire has more on this.

The number of foreclosures in the US is continuing to rise with one in every 355 households facing default notices, scheduled auctions and bank repossessions, the latest figures show.

Despite tentative signs that property prices are recovering there is still a huge backlog of properties that are in negative equity and talking about a recovery is nonsense while foreclosure continue on a steep upward path, experts point out.

Figures from Realty Trac’s July Foreclosure Market Report show that notices delivered to property owners increased nearly 7% from June to July, and are now up 32% from July 2008. It is the third time in the last five months that a new record figure has been recorded.

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‘Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions,’ said RealtyTrac CEO James Saccacio.

Nevada continues to lead the nation as the state with the greatest number of foreclosure filings for the 31st consecutive month, with one in every 56 households receiving a foreclosure filing in July.

However, a state law enacted on 1 July that requires lenders to offer mediation before beginning the foreclosure process reduced initial default notices 18% in July, RealtyTrac said. But scheduled auctions and bank repossessions increased more than 20% during the same period.

California and Arizona were second and third, respectively, on the list of top foreclosure activity states, with one in 123 California households and one in 135 Arizona homes receiving a notice during the month.

Florida, Utah, Idaho, Georgia, Illinois, Colorado and Oregon round up the top 10 states with the highest foreclosure activity.

The bleak picture is confirmed by figures for California from Foreclosure Radar which show that in July the volume of foreclosures scheduled for sale in the state reached a record high, jumping 31.6%, nearly double the level of last year. The report says that the overall forecast for the California property market remains bleak.

This article has been republished from Property Wire. You can also view this article at
Property Wire, an international real estate news site.

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