Final approval of the housing bill by the Senate and President George W. Bush can't come fast enough for homeowners desperate to keep their houses and builders struggling to compete against distressed property pricing. According to data released today by RealtyTrac, foreclosure filings occurred on nearly 740,000 properties in 2008's second quarter, a rise of 14 percent compared to the previous quarter. Year-over-year, such activity stands 121% higher than the second quarter of 2007.
The most troubled states remain places such as Arizona, California, Nevada, and Florida, formerly the country's hottest housing markets. According to RealtyTrac, the second quarter brought foreclosure filings to one in 43 Nevada households, which represents a total of almost 25,000 properties.
Nationally, the foreclosure rate is 1 in every 171 households.
California is suffering as well, with 10 cities in RealtyTrac's list of the 20 largest metropolitan areas with the highest foreclosure rates. Six of those made the top 10, with Stockton, Calif., and Riverside-San Bernardino (both formerly popular areas with builders and buyers because of demand and affordability) capturing the depressing distinction of being the cities with the two highest foreclosure rates in the nation during the quarter.
For better or worse, the type of foreclosure activity seems to be changing. "Bank repossessions, or REOs, accounted for 30% of total foreclosure activity in the second quarter, up from 24% of the total in the first quarter," said James J. Saccacio, chief executive officer of RealtyTrac. "This shift in the distribution of activity indicates that there is a progression toward purging the problem loans out of the system—at which point the housing market can regain some sense of normalcy. Of course, if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery."
Alison Rice is senior editor, online, at BUILDER magazine.
Learn more about markets featured in this article: Riverside, CA.