Wednesday, July 29, 2009

Report: June Surge in Lender Repossessions in Seattle, Las Vegas and Phoenix

by Bill McBride on 7/29/2009 06:34:00 PM

Three stories from DataQuick:

June Seattle MSA Home Sales and Median Prices

Last month 16.9 percent of all resales were houses or condos that had been foreclosed on in the prior 12 months, down from 19.2 percent in May and a peak of 23.9 percent in January this year.

However, there are more foreclosure resales on the way, and they will continue to weigh on home prices for the foreseeable future. In June, lender repossessions spiked: Nearly 863 houses and condos were lost to foreclosure in the three-county Seattle region, up nearly 37 percent from May and up 119 percent from a year ago. It was the highest monthly total since foreclosures began to surge in 2006. The figures are based on the number of trustees deeds filed with the county recorder's office.
emphasis added
Phoenix June Home Sales, Median Prices Up
In June, 60.8 percent of the Phoenix-area houses and condos that resold had been foreclosed on in the prior 12 months, down from 64 percent in May and the lowest since such foreclosure resales were 58.6 percent of all resales last November. Foreclosure resales hit a high of 66.2 percent this March ...

Absentee buyers made up 39.6 percent of all purchases – a relatively high percentage in the West. ...

For the foreseeable future, the Phoenix region will continue to have many foreclosures to recycle, and that inventory of lender-owned property will weigh on home prices. In June, lender repossessions spiked: Nearly 5,800 houses and condos were lost to foreclosure in the two-county Phoenix region, up nearly 38 percent from May and up 40.8 percent from a year ago. It was the highest monthly total since foreclosures began to surge in 2006.
Las Vegas June home sales higher; median $ steady
About 70 percent of the Las Vegas-area houses and condos that resold in June were foreclosure resales, meaning those homes had been foreclosed on in the prior 12 months. That was up from 59 percent in June 2008 but the lowest for any month since it was 68.9 percent last December. Foreclosure resales peaked in April at 73.7 percent of total resales ...

Looking ahead, the Las Vegas region will still have many foreclosures to burn off, and that inventory of distressed property will weigh on home prices. In June, lender repossessions spiked: Nearly 3,600 houses and condos were lost to foreclosure in Clark County, up 54 percent from May and up 34 percent from a year ago. It was the second-highest monthly total, behind 3,718 this February, since foreclosures began to surge in 2006.
Las Vegas and Phoenix have far more foreclosure resales than Seattle, but all three cities are seeing a surge in foreclosures.

I spoke with a SoCal developer yesterday, and he said there are some positive signs in the California Inland Empire, but he is worried about another flood of REOs. Every bank he has spoken with (he does some consulting for banks on their real estate holdings) is sitting on a pile of REOs and homes in the foreclosure process.

It is unclear how big this surge will be, but here it comes.