Completed foreclosures continue to drop – for 17 months in a row – now down 16% from April 2012. 52,000 homes were lost to foreclosure in April 2013 – down from the 62,000 a year ago – but still above the 21,000 per month average between 2000 and 2006. The worst of the foreclosure storm is behind us, but we still have a backlog of inventory to work through the system… before they are gone.
Since September 2008 there have been approximately 4.4 million completed foreclosures across the country. Currently, about 1.1 million homes in the U.S. are in some stage of foreclosure, down 24% from the 1.5 million in April 2012. Month over month, the foreclosure inventory was down 2% from March 2013. This downward trend in new completed foreclosures and existing inventory is solidly in place. It’s only a matter of time before we are back to “normal” foreclosure numbers again.
Foreclosure Report Highlights:
- Six states have year-over-year declines in the foreclosure inventory of more than 40% and in Arizona and California the year-over-year decline is more than 50%.
- The five states with the highest number of completed foreclosures for the 12 months ending in April 2013 were: Florida (102,000), California (79,000), Michigan (68,000), Texas (53,000) and Georgia (47,000). These five states account for almost half of all completed foreclosures nationally.
- The five states with the lowest number of completed foreclosures for the 12 months ending in April 2013 were: South Dakota (81), District of Columbia (100), North Dakota (461), Hawaii (466) and West Virginia (527).
- The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (9.5%), New Jersey (7.4%), New York (5.1%), Maine (4.4%) and Nevada (4.3%).
Fewer distressed properties combined with improving home prices and a pickup in home purchases are significant signals that the ongoing recovery in the housing and mortgage markets continues to gather steam.
The question that remains on everyone’s mind is….
“How much time is left before the foreclosure backlog is gone and we are back to a ‘normal’ foreclosure market”?
Based on what I’m seeing in my market in California, plus hearing from my many clients across the country, the housing recovery that began a year ago, is building steam and prices are rising much faster than anyone anticipated. Our new problem is a shortage of “for sale” foreclosure inventory, and too many “all cash” institutional buyers aggressively bidding on every listed property. Bidding wars are breaking out as these investors plan to rent and hold and don’t mind paying too much today for a property that will be worth twice as much in just a few years.
So what’s a profit-minded flip-investor to do?
To begin, don’t compete with institutional cash investors. Instead, find great deals and SELL to these deep pockets. If they are willing to pay retail prices, then focus on finding wholesale deals and flip them to these buyers who are ready to close fast with cash in their hands!
This is exactly what my clients are doing, with my direction. They are focusing on finding wholesale foreclosures deals that are NOT listed for sale and getting those “hidden” motivated owners to sell, at wholesale prices. We are structuring win-win-win deals, where the seller, my new investor clients, and their money partners, all put money in the bank.
The key is finding the motivated foreclosure owners who have not listed their homes for sale… to avoid the bidding wars. I will share those details with you Wednesday at 6pm Pacific in my Strategy Session Webinar. If you’re not already registered, you’ll want to secure your seat quickly here, as I limit capacity to keep things intimate.
Mark your calendar and make sure you join me in “Your Agents Foreclosure Leads are Dead. Find Wholesale Hidden Deals Your Competition Misses” June 5, 2013, 6pm Pacific, 9pm Eastern. See you then.
Read More about Foreclosure Inventory:
- Foreclosure Shadow Inventory Continues Decline
- Shadow Foreclosure Inventory Continues to Shrink
- Foreclosure Home Shadow Inventory: Going Faster Than Expected