More and more foreclosures

RealtyTrac, the California-based expert on foreclosure listings, counted 3.1 million foreclosure filings during 2008. The new results represented an 81 percent increase from December 2007 to December 2008. No doubt, there is a foreclosure crisis in the mythical national housing market.  Most of the foreclosures can be found in four sub-markets: Nevada, Florida, Arizona and California.

The latest (January 15, 2009) RealtyTrac report places Pennsylvania near the bottom of the 50 states and the District of Columbia in terms of foreclosure filings. Of the more than three million foreclosures in the U.S. last year, Pennsylvania ranked 32nd with about 43,000 filings.  It is clear that foreclosures are relatively limited in the Commonwealth compared with other states (e.g., Ohio is ranked 7th and New Jersey is ranked 10th).

Consistent with Pennsylvania’s tendency to lag behind national trends in house price movements, since 2006, the rate of foreclosures nationally was up 225 percent while in Pennsylvania, the two-year percentage change was only 69 percent. Yet, over the past year, the Pennsylvania rate was up 127 percent while the national rate grew at only 81 percent. Pennsylvania’s foreclosure filings were slow to develop but now are in full swing.

Yet, the national foreclosure rate (number of foreclosed units as a percentage of the total housing stock) was 1.84 percent at the end of 2008. Pennsylvania’s was a third of this incidence at 0.68 percent. For comparison purposes, consider that Nevada (at 7.29 percent), Florida (4.52 percent), Arizona (4.49 percent) and California (3.97 percent) lead the nation in distressed markets. In addition, of the top 100 metropolitan areas, 42 report foreclosure rates higher than the national average (the highest being Stockton, CA with 9.46 percent and Las Vegas with 8.89 percent).

None of the top 42 largest foreclosure metropolitan areas are in Pennsylvania.

However, the future looks like a time for more foreclosure activity. Moody’s Economy.com predicts another 18 percent additional foreclosures during 2009. Another report fears that the official foreclosure statistics have been under-reporting the actual experience due to many homes being kept off the market by lenders. It is clear that we have not bottomed out yet.

What do you think will happen in Pennsylvania?

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This entry was posted on Tuesday, February 3rd, 2009 at 6:37 am and is filed under Economics. You can follow any responses to this entry through the RSS 2.0 feed.