Foreclosures on a Free Fall, 66% Below Peak
Corelogic | February 11, 2015
Foreclosures are making up a much smaller share of many markets’ housing inventories and slowly falling back in line with historical norms. Completed foreclosures totaled about 39,000 nationwide in December 2014, a 13.7 percent year-over-year decrease and a 66 percent plunge from the peak in September 2010, according to CoreLogic’s December National Foreclosure Report.
Read more: REOs Are Fetching Higher Prices
What’s more, the 12-month sum of completed foreclosures for 2014 — 563,294 — is at its lowest point since November 2007, according to the report. Completed foreclosures have fallen every month for the past 34 consecutive months. Historically, prior to the housing crisis, completed foreclosures averaged 21,000 per month nationwide.
"Completed foreclosures last year were less than half the 1.2 million peak in 2010, but remain twice the level of normal activity over 10 years ago," says Sam Khater, CoreLogic’s deputy chief economist.
Yet, "the steady decline in the number of completed foreclosures is a good sign of healing in the U.S. housing market," adds Anand Nallathambi, president and CEO of CoreLogic. "Nonetheless, there remain many pockets of the country with very high foreclosure inventories, underscoring the unevenness of the nation's housing recovery."
Completed foreclosures reflect the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, about 5.5 million completed foreclosures have occurred across the country.
While foreclosures overall are falling, many markets continue to struggle with the clearing of foreclosures from their pipelines. About 552,000 homes nationwide, as of December 2014, are in some state of foreclosure, known as foreclosure inventory. That represents a 34 percent year-over-year decrease. Also, all states posted double-digit year-over-year decreases in foreclosure inventory, except for West Virginia (which saw a 9.5 percent decrease) and the District of Columbia (which posted a 21.7 percent increase).
In its latest existing-home sales report, the National Association of REALTORS® reported that many markets are seeing foreclosure and short sales fetch higher dollars at sale with discounts slowly shrinking. Foreclosures sold for an average discount of 15 percent below market value in December, down from 17 percent in November. Short sales were discounted, on average, by 12 percent below market value, compared to 13 percent in November.
5 States With the Highest Completed Foreclosures
Five states alone accounted for nearly half of all completed foreclosures nationally. The following five states posted the highest number of completed foreclosures for the 12 months ending December 2014, according to CoreLogic’s report:
- Florida: 118,000
- Michigan: 49,000
- Texas: 35,000
- California: 29,000
- Ohio: 28,000
5 States With Highest Foreclosure Inventory
The following states saw the highest foreclosure inventory as a percentage of all mortgaged homes in December 2014:
- New Jersey: 5.2%
- New York: 4%
- Florida: 3.7%
- Hawaii: 2.7%
- District of Columbia: 2.4%