RealtyTrac, Irvine, Calif., on Thursday reported a total of 533,813 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2016, down 20% from the previous six months and down 11% from the first six months of 2015.
Perhaps more ominously, RealtyTrac found that even though the number of foreclosure auctions fell 23% from this time last year to 227,473, 27% of all properties sold at foreclosure auction were purchased by third-party investors, the highest share for the first six months of any year since 2000 — the earliest national data available.
The investor share of purchases at foreclosure auction reached 20% or higher in only two previous years: 2005 (20%) and 2015 (22%). The investor share of purchases at foreclosure auction dropped to a 17-year low of 11% in 2008.
In an interview with Bloomberg, Daren Blomquist, senior vice president at RealtyTrac, said many of the investors are "mom and pop" buyers, though he did not specify how many. That could be the hairdressers and cab drivers of lore whose personal finances crashed with the housing market in 2007.
Counter to the national trend, 19 states posted year-over-year increases in foreclosure activity in the first half of 2016, including Massachusetts (up 46%); Connecticut (up 40%); Virginia (up 18%); Alabama (up 11%); and New York (up 10%).
Among the nation’s 20 most-populated metro areas, five posted year-over-year increases in foreclosure activity: Boston (up 38%); Philadelphia (up 7%); New York (up 4%); Washington, D.C. (up 3%); and Baltimore (up 1%).
“Although there are some local outliers, the downward foreclosure trend continued in the first half of 2016 in most markets nationwide,” said Daren Blomquist, senior vice president at RealtyTrac. “While U.S. foreclosure activity is still above its pre-recession levels, many of the states hit hardest by the housing crisis have now dropped below pre-recession foreclosure activity levels. With some exceptions, states with foreclosure activity continuing to run above pre-recession levels tend to be those with protracted foreclosure timelines still working through legacy distress from the last housing bust.”
Read more on the report here.