RealtyTrac’s U.S. Foreclosure Market Report for March and the first quarter of 2014 showed a 4 percent increase from February, but a decrease of 23 percent from March 2013.
The monthly increase in foreclosure activity was driven by a 7 percent month-over-month increase in foreclosure starts — the initial public notice starting the foreclosure process — and a 6 percent monthly increase in scheduled foreclosure auctions. Lenders repossessed 28,840 U.S. properties in March, down 5 percent from the previous month and down 34 percent from a year ago to the lowest level since July 2007 — an 80-month low.
“There are always going to be homeowners who aren’t able to make their house payments, but we are definitely back to a normal foreclosure rate,” said Sheldon Detrick, of Prudential Detrick/Alliance Realty, covering the Oklahoma City and Tulsa, Okla., markets. He noted that first quarter foreclosure activity in Oklahoma dropped to its lowest level since the second quarter of 2007. “The distressed listings we’re seeing in the Oklahoma market are zombie and vampire foreclosures, where properties have either been lost in litigation or held [out] of the market until now.”
March was the 42nd consecutive month where foreclosure activity around the country decreased from a year ago. One in every 385 U.S. housing units had a foreclosure filing in the first quarter.
Despite the decrease in overall foreclosure activity in the first quarter, 29 states posted annual increases in scheduled foreclosure auctions, including Utah (up 226 percent), Oregon (up 177 percent), Connecticut (up 131 percent), New Jersey (up 79 percent), Delaware (up 49 percent), New York (up 47 percent), Maryland (up 46 percent), Massachusetts (up 37 percent), Nevada (up 21 percent) and Florida (up 21 percent).
Meanwhile foreclosure starts in the first quarter increased from a year ago in 19 states, including New Jersey (up 83 percent), Maryland (up 43 percent), Indiana (up 38 percent), Delaware (up 24 percent), Connecticut (up 13 percent), and California (up 10 percent). The increase in California was the first annual increase since the second quarter of 2012, and the first double-digit percentage increase since the fourth quarter of 2009.
“Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,” said Daren Blomquist, vice president at RealtyTrac. “This is most evident in judicial foreclosure states that were more likely to have impediments in the foreclosure process, but there are also signs of this catch-up trend happening in some non-judicial states like California, where an increasing number of judicial foreclosure filings boosted foreclosure starts in the first quarter.
“Banks will also now be able to devote more resources to dealing with the lingering inventory of nearly half a million already-foreclosed homes that still need to be sold,” Blomquist continued. “Our estimates indicate only 10 percent of these bank-owned properties are listed for sale and more than half are still occupied by the former homeowner or tenant.”