Foreclosures Are Up, Up, Up— No Matter How You Count

Posted by: Maya Roney on July 30, 2007

The total 2007 U.S. foreclosure tally is quickly nearing one million and could exceed two million by the end of the year, RealtyTrac said this morning. The Irvine, Calif.-based Web site counted 925,986 foreclosure filings in the first half of 2007, up 55% from the first half of 2006. That’s a chillingly-high rate of one filing per 134 households.

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“Despite a slight drop in June, foreclosure activity shows no sign of slowing down,” said RealtyTrac CEO James Saccacio in a statement. “Based on the rate of foreclosure activity in the first half of 2007, we could easily surpass 2 million foreclosure filings by the end of the year, which would represent a year-over-year increase of over 65 percent.”

Unsurprisingly, Nevada posted the nation’s highest foreclosure rate in the first half of ’07, with one filing for every 40 households—more than triple the amount of filings reported in the same time period last year. Colorado, California, Michigan, Florida, Ohio, Georgia, Arizona, Connecticut and Indiana rounded out the rest of the top 10 states with the highest foreclosure rates so far in 2007.

RealtyTrac has been accused of inflating its foreclosure estimates since it includes default notices, auction sale notices and bank repossessions— allowing the same property to register multiple times as it goes through the different stages of the foreclosure process.


But the firm’s midyear report includes a new “unique property” count marking the total number of addresses with some type of foreclosure action filed against them in the first six months of the year. This number—573,397— is 58% higher than the unique property count for the first half of 2006.

Reader Comments

Martin

July 30, 2007 12:47 PM

65% Increase by the end of this year... This leads me to really worry about lending and what the nations big lenders are going to do. They will definitely start slashing more products and that will also affect the housing market. I wonder if the government will get involved eventually...???

Developersagent.com

July 30, 2007 2:04 PM

Its a concern for everyone in the industry. From agents like myself, to contractors, to lenders, my girlfriend is one, to appraisers, to home inspectors etc, a skew of industry leaders are all unstable about whats to come with the market. Fortunately cities like DC, well actually DC specifically, has remained somewhat stable through these tough times. Due to DC's overwhelmingly large number of homeowners employed by or subsidized by government funding or salaries, the homeowners and buyers are fairly overwhelming. I hope the government will impose sanctions or grants to help out the rest of the country.

cindy@staged4more

July 31, 2007 5:10 PM

I hate hearing about foreclosures, because I think there's nothing more heartbreaking than losing your own house. A house is a very emotional object that we own, and to lose all that is gut wrenching to hear. Also I work as a stager, it makes convincing the sellers to stage very difficult. Most foreclosed homes are in such bad shapes that generally they desperately need staging to make the home looks show ready. But they can't afford it and I can't work for free. Tough tough situations!

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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