by Gene Wunderlich
It’s all in the perspective. A recent media article featured data from a report by RealtyTrac showing that the Riverside–San Bernardino area remains #3 in the nation for foreclosure activity. I cringe when I see these kinds of articles. Because while the underlying report data is accurate, a reporter, who typically knows little about real estate, has no idea what the data means. They have no perspective, thus their summaries are often misleading to their readers causing unwarranted confusion and concern.
For example, data shows that Murrieta has 1 home in every 149 in foreclosure for a total of 264 ‘foreclosures’. Temecula was close behind with 258 ‘foreclosures’ and 1 in 152 households, Lake Elsinore had 147 ‘foreclosures’ with 1 in 151 households. They then compared our region with the national average of 1 in 686, making us sound pretty bad off.
But while the data is accurate – the media interpretation is not, or at least incomplete. So, as Paul Harvey used to say, “Now, the rest of the story…” I’ll use Murrieta’s numbers, since that’s what the article used, but the statistics and comparables are very similar across all markets in Southwest California.
First, it’s not surprising that our area still ranks high on the foreclosure scale – after all it was just a few years back that we were among the top three in the nation with Sacramento and Stockton (which still rank #1 & #2). But rather than 264 homes going back to the bank as the article intimated, there were just 140 in June for Murrieta, down 43% from last June. And only 25 of those are actively on the market for sale. Bank-owned homes as a percentage of our market has continued to decline to just 7% of our active market in July. The number of both REO and Short Sales on the market has dropped by half since January.
Pre–foreclosure delinquencies are down 8% for the region, and Notices of Sales (NOS) are down 28%. The only number that bumped up slightly in June was Notices of Default (NOD), which were up 3% (68 to 70). The rest are in some stage of the foreclosure process but may never revert to the bank. Homes actually going back to the bank are down 68% from last June, 3rd party (courthouse step) sales are down 22% and cancellations of foreclosure sales by banks are up 17%.
So there you have it. Yes we are still #3 in the country for ‘foreclosure activity’ and with 1 in 150 homeowners still being affected that’s not great. Compared to North Dakota with just 3 foreclosures in the whole state and a ration of 1 in 105,833 homeowners in default, we look pretty dismal. It’s all in your perspective.
But we’re still selling homes at a record pace this year and our prices are inching up. Compared to where we were four years ago, or even a year ago, we’re headed in the right direction. They didn’t tell you that. For all your local housing data visit: http://www.slideshare.net/genewunderlich/8-realtor-report-13973332.
Gene Wunderlich is the Government Affairs Director for Southwest Riverside County Association of Realtors.