11/23/2011

American foreclosure rate improves by a third

The US foreclosure rate has improved by nearly a third year-on-year.

RealtyTrac  released its October 2011 Foreclosure Market Report this week showing that filings, default notices, scheduled auctions and bank repossessions took place on 230,678 U.S. properties in October, which is down nearly 31% on October 2010.

The report also revealed that one in every 563 US homes was served with a foreclosure notice during the month.

"The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we've been in for the past year as lenders corrected foreclosure paperwork and processing problems," James Saccacio, chief executive officer of RealtyTrac told OPP.

"However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real estate recovery."

Foreclosure auctions took place on 85,321 US properties in October, down 38% YoY. Lenders repossessed a total of 67,624 US properties in October, which is a 27% fall YoY.

P4P comment

Negative news still dominates comment on the American property market, but this reduction in forclosures over the past year shows that supply is beginning to dwindle. This brings closer the tipping point of when supply of foreclosures is not enough to meet local demand plus the fast growing buying by foreign investors.

When that point is reached, prices are likely to adjust sharply up.