Friday, November 17, 2006

RealtyTrac: Foreclosures Pass 1 Million for 2006

by Bill McBride on 11/17/2006 06:19:00 PM

RealtyTrac reports: Foreclosures Surpass 1 Million Mark in October

“So far this year more than 1 million properties have entered some stage of foreclosure nationwide, up 27 percent from the same time last year. ... Our data from the last three months shows that foreclosures are definitely trending upward...”
James J. Saccacio, chief executive officer of RealtyTrac.
Check the report for your state.

Here is a table from an earlier post on default notices in California (source: DataQuick):

California Default Notices, Source: DataQuick
YearDefault Notices
1992100,573
1993121,416
1994122,530
1995135,713
1996162,597
1997141,180
1998122,775
1999101,053
200088,666
200181,003
200278,784
200366,127
200452,674
200554,476
2006 (through Q3)66,185


There were 26,705 default notices sent to California homeowners in Q3. At that pace, the number of default notices sent in 2006 would be the highest since 1999 (66,185 through Q3 + 26,705 = 92,890).

That projection now seems optimistic. RealtyTrac shows 13,601 default notices sent to California homeowners in October alone (half of my Q4 estimate in one month).

The rapid increase in foreclosure activity, combined with falling home prices and a weakening California economy, lead me to believe there will be a record number of default notices sent to California homeowners in 2007, surpassing the previous record of 162,597 in 1996.

Note that 1996 was the last year of the previous housing bust in California. The bust lasted over 6 years. Next year will only be the second year of the current bust.