Housing Paradox: When Foreclosure Decline is A Bad Sign
Foreclosures in 178 of the 211 metropolitan areas in the U.S. declined in the first half of 2010 compared to the first half of 2009, according to RealtyTrac.
But the foreclosed properties specialist said this merely signals that the foreclosure process in many states remains bogged down.
“Foreclosure activity continued to slow in the first half of 2011, especially in the most foreclosure-saturated markets and in markets where the judicial foreclosure process is used,” said James J. Saccacio, CEO of RealtyTrac.
The 20 metro areas with the biggest year-over-year decreases in foreclosure activity were all in states with judicial foreclosure processes — New York, Maryland, Florida, New Jersey, Connecticut, Massachusetts and Illinois, Saccacio said.
“These dramatic decreases indicate the foreclosure pipeline continues to be clogged in many local markets across the country, sometimes by a glut of already-foreclosed properties that are not selling quickly, sometimes by a mountain of improperly filed foreclosures that are blocking the inflow of new foreclosure filings — and sometimes by both,” Saccacio said.
Housing industry analysts maintain that the housing and mortgage markets will not see sustained recovery until the large number of foreclosed properties has been sold.