New real estate data indicate a trend among lenders to increase foreclosures on residential properties in California.
Research firm RealtyTrac says taken together, all three phases of the foreclosure process – default notices, auctions and bank repossessions – were down 25 percent in May compared to a year ago.
But if you drill down and only look at bank repossessions, RealtyTrac’s Daren Blomquist says the numbers are up. “We saw a 26 percent increase in bank repossessions from a year ago," says Blomquist. "It’s now been the second consecutive month where we’ve seen an increase month where we’ve seen an increase in bank repossessions on a year over year basis.”
Blomquist says banks will put those homes back on the market in the next six to nine months. That’s good for first time buyers; it’ll give them more inventory to chose from. But it’s not so good for companies that build new houses. “These bank repossessions are properties that definitely would compete with new homebuilders at a lower price point often than the homebuilders can even build their homes for.”
California now has the 13th highest foreclosure rate in the country.
Overall home foreclosure activity is down in the Sacramento area. RealtyTrac says there were 928 properties with foreclosure filings in the month of May, down 13 percent from the previous month and a nearly 30 percent drop from a year ago. But Blomquist says if you look just at "bank repossessions" - the numbers are up dramatically.
"We do see that consistent pattern where the bank repossessions, the final stage, is increasing, even though the earlier stages of foreclosure are decreasing," says Blomquist. "In Sacramento, bank repossessions in May were up 36 percent from a year ago, and we saw that in quite a few other markets in California."
...those markets include: Modesto, Merced, Chico and Fresno. In fact, repossessions are up statewide; lenders took back more than 25-hundred California homes last month - a 26 percent increase from a year ago. Blomquist says the increase is evidence that banks are clearing out a backlog of distressed inventory.
Despite a big decrease in home foreclosure activity from a year ago, Nevada continues to have the third highest foreclosure rate in the country, behind Florida and Maryland. Blomquist says Nevada's foreclosure activity in May was down 57 percent from a year ago.
"That demonstrates for us how bad the problem was in Nevada that we see this 57 percent decrease, and that's continuing a downward trend we've been seeing over the last six months in Nevada. But despite that the foreclosure rate is still nearly twice the national average there in Nevada."
Blomquist says one in every 717 Nevada homes received a foreclosure filing in the Month of May.