The good news about real estate is coming in dribs and drabs, camouflaged by an ongoing flow of bad news.
According to RealtyTrac, U.S. foreclosure filings fell 10% in January from December, but they remained 15% higher than a year earlier. That means that one in every 409 U.S. housing units received a foreclosure filing in January, which is still quite high.The figures did not surprise some experts. "January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January," said James J. Saccacio, chief executive officer of RealtyTrac, in a press release. "If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works."
The National Association of Realtors reported that existing home sales rose in the fourth quarter in 49 states and Washington, D.C., on a year-over-year basis. All but three states had double-digit increases. Nonetheless, the national median existing single-family price was $172,900, down 4.1% from the fourth quarter of 2008.
Indeed, housing supply continues to outstrip demand. Near my home in Southern New Jersey, one development has many McMansions for sale at rock-bottom prices, houses abandoned by people who could no longer afford their mortgage payments. There's a catch, of course: Many of those residences need massive amounts of work because they've been vacant for months. Winter temperatures have caused pipes to burst, ruining interiors. And some delinquent mortgage holders trashed their properties before fleeing creditors, sometimes in the middle of the night.
Scenes like this are depressingly common, especially in once white-hot real estate markets in Nevada, Arizona, California and Florida.
Conditions in California and Florida Go From Worse to Bad
Not surprisingly, Nevada's real estate market remains a mess with the country's highest foreclosure rate for the 37th straight month, according to RealtyTrac. One in every 95 Nevada housing units received a foreclosure filing in January -- more than four times the national average. But the Las Vegas market, with the highest foreclosure rate among metropolitan areas, is showing signs of bottoming: Realtors sold 17.3% more homes in January versus a year ago, according to the Greater Las Vegas Association of Realtors. Though the median price had a year-over-year decline of 15.7% to $134,925, it was down only 0.8% from the previous month.
Arizona's 4% month-over-month increase in foreclosure activity gave it second highest for closure rate in January. One in every 129 Arizona housing units received a foreclosure filing during the month. In Phoenix, with the second-highest foreclosure rate in the nation, foreclosure activity increased nearly 4% from the previous month: One in every 102 housing units received a filing in January.
Foreclosure activity decreased by double-digit percentages from the previous month in both California and Florida, and the two states registered nearly identical foreclosure rates -- one in every 187 housing units received a foreclosure filing -- according to RealtyTrac. Six California cities registered foreclosure rates among the top 10: Modesto at No. 3 (one in every 107 housing units); Stockton at No. 4 (one in 107); Riverside-San Bernardino-Ontario at No. 5 (one in 109); Merced at No. 6 (one in 109); Vallejo-Fairfield at No. 7 (one in 112); and Bakersfield at No. 8 (one in 118). Two Florida cities achieved that dubious distinction: Cape Coral-Fort Myers at No. 9 (one in 121); and Orlando-Kissimmee at No.10 (one in 143).
The improvements that RealtyTrac pointed out are noteworthy but small. As my colleague Charles Hugh Smith reported a few months ago, the financial information and analysis firm Fiserv is forecasting that the national median home price will fall 11.3% by summer 2010.
Foreclosures Fall in January, but Still Higher than a Year Ago