When the housing bubble burst in 2007 and more than six million families lost their homes, the pain was greatest in markets where lax lending standards (which have since been outlawed) were the most widespread. Florida, Nevada, Arizona, and California—the so-called “sand states”—led the nation in foreclosures.
What has changed since then?
Today, the foreclosure picture has changed dramatically. Last year’s number of 1.1 million foreclosure filings was the lowest annual total since 2006, the year the housing bubble began to burst. The number of completed foreclosures in January 2016 was down 67.6 percent from the peak of 117,743 in September 2010.
The geography of foreclosures also has changed. Today, Florida and California remain in the top five states for foreclosures. The five states with the highest number of completed foreclosures for the 12 months ending in January 2016 were:
- Florida (74,000)
- Michigan (49,000)
- Texas (29,000)
- California (25,000)
- Ohio (24,000)
These five states accounted for almost half of all completed foreclosures nationally.
“In 2015 we saw a return to normal, healthy foreclosure activity in many markets even as banks continued to clean up some of the last vestiges of distress left over from the last housing crisis,” said Daren Blomquist, vice president at RealtyTrac. “The increase in bank repossessions that we saw for the year was evidence of this cleanup phase, which largely involves completing foreclosure on highly distressed, low-value properties.
“Meanwhile, local economic problems became a larger driver of foreclosure activity in 2015,” Blomquist said. “Examples of this are Atlantic City, New Jersey, which posted the nation’s highest metro foreclosure rate for the year, along with several heavy oil-producing markets in Texas and Oklahoma where foreclosure activity increased in 2015, counter to the national trend.”
Foreclosure rates are on the rise in other areas
In 24 states and the District of Columbia—many of which missed the massive defaults seven years ago—there was an increase in foreclosure activity in 2015 compared to 2014. These included Northeastern states like Massachusetts (up 55 percent) and New York (up 24 percent), where home price increases have lagged and states suffering from the downturn in oil prices like Oklahoma (up 36 percent),) and Texas (up 16 percent). States with the highest foreclosure rates in 2015 were New Jersey (1.91 percent of housing units with a foreclosure filing), Florida (1.77 percent), Maryland (1.60 percent), Nevada (1.40 percent), and Illinois (1.26 percent).
Among the nation’s 20 largest metro areas, six posted year-over-year increases in foreclosure activity in 2015: Boston (up 44 percent, St. Louis (up 38 percent), Dallas (up 25 percent), Detroit (up 22 percent), New York (up 9 percent), and Houston (up less than 1 percent).
Metro areas with the highest foreclosure rates in 2015 were Atlantic City, New Jersey (3.43 percent of housing units with a foreclosure filing); Trenton, New Jersey (2.14 percent); Tampa Bay-St. Petersburg-Clearwater, Florida (2.03 percent); Jacksonville, Florida (2.02 percent); and Miami (1.98 percent).
What does this mean for you?
If you’re considering an investment in a foreclosure, you may no longer be limited to searching in areas that were hardest hit by the housing crisis. That may mean that you find a greater variety of foreclosures in more popular neighborhoods.
It may also, however, mean more competition. And when the process of buying a foreclosure is already so complex, more competition isn’t exactly welcome.
Filed Under: Borrower Tips, Housing Market
Tagged with: buying a foreclosure, foreclosure, foreclosure data, foreclosure tips, how to buy a foreclosure, is a foreclosure worth it, states with highest foreclosure, where to find foreclosures