Foreclosures Rise 158% from May 2007

, which assembles foreclosure data on a state and national basis, notes that one in every 483 U.S. households received a foreclosure filing during the month of May. This is the highest monthly foreclosure rate since they began tracking foreclosures in January 2005.

Here's the breakdown:

• Lenders took possession of 73,794 houses in May -- 158% greater than the 28,548 REOs in May 2007
• 1.2 million foreclosed single-family homes will enter the market
• Foreclosures will account for 30% of national home sales in 2008
• Bank repossessions (REOs) accounted for 28% of total foreclosure activity
• Default notices increased 35% year over year
• The 3 highest foreclosure rates by state are Nevada (1 in every 118 households), and California (1 in every 183) Arizona's (1 out of 201) in May 2008
• Auction notices were up 13% year over year (but decreased 3% from the previous month)
• Foreclosed properties typically sell for ~20% less than comparable homes
• Foreclosed properties depress local home prices by 6%

Wow, those are pretty robust numbers. Based on the foreclosure data alone, it appears that Housing is accelerating to the downside -- we are nowhere near a sustainable bottom yet . . .


http://seekingalpha.com/article/81259-foreclosures-rise-158-from-may-2007?source=d_email

 

And the actual numbers could even be worst. One lady friend called her lender to explain her challenges of paying her mortgage payments and the lender told her to do her best and that they were behind in addressing all the delinquent issues. They did hit her credit report for the late payments….just haven’t sent any foreclosure letters.

She's maxed out her credit cards and late on utilities.


Purchased home for $370K+, and currently appraised under $300k

 

I think several factors are glossed over with this bit of information. I see it as many folks were inticed into things that they could not truly afford. Many people purchase the most they could for their money rather than the most they should be able to afford. Instead of trying to get the $350,000 home for interest only, maybe they should have been looking at a principal and interest home and loan for say $250,000.

When will folks start to admit that the home is not supposed to be the sleeper, forced savings (appreciation) account? It's not sound fiscal thinking to play the leapfrog game to the next larger more expensive home. Finance to the hilt, to the edge of possibility, and hope to get out before the the P&I payment comes due is not a good strategy. A "live for the most lifestyle" permeates the culture today. Many folks have no plan other than get a big home, have a few kids and a great car. And they seem to try to max out based on a "desire guideline," all of those wishes whether they can afford to or not.

 

Absolutely! not even close to a bottom, and accelerating. my 2 fave economists, Zandi and roubini, have very ugly forecasts, mainly based on inventory data, and the number of ARM's readjusting through 2009.

One thing many people do not realize is the dire straight of consume debt. There are a lot of people out there completely maxed out on credit cards. Far more than ever before. the consumer is about to hit the wall big time. that's the next shoe to drop.

 

canyonman00 said""Many folks have no plan other than get a big home, have a few kids and a great car.""

I think way too many kids were planned about as well as the home purchase!:eek:

 

That shoe has already dropped! Only getting worse too.

 

Since this industry is near and dear to my heart, all I have to say is that inventories of new and existing homes keep rising, one out of every three sales this year is forecast to be an REO (a repossessed home), and that there can't be a bottom until inventories quit rising.

Rising inventories pressure prices, especially when sellers panic as they perceive (rightly or wrongly) that time is not on their side, and that the value of their home is eroding with each consecutive month.

Not a pretty picture, and not anywhere near a bottom in most part of the country, IMO.

There are a few exceptions, as there always are.

 

I have enjoyed my rental status in both Chicago and Dallas through all these gyrations of the real estate market. The land holding that I have (Dallas) has appreciated just a tad, but I was well within my cash positions and have very little financing on it. Both of my rentals are live/work lofts that I've customized with over 5,000 square feet each in the hearts of both cities. And in these tough times, I'm looking to expand!

 

American dream became the American nightmare.

 

Time to buy will be soon though. Very soon. There are going to be some great deals on real estate. Prices still need to fall 50% or more though.