When the number of foreclosures decreases, it’s not without
impact for NOLA homeowners and investors. In any given month, NOLA
foreclosures may not always mimic the national averages, but over the long run,
they do tend to be pretty close. And the national trend is clear: first quarter
foreclosure activity decreased to the lowest level since the second quarter of
2007 (‘activity’ includes default notices, scheduled auctions and outright bank
repossessions).
Recent figures from RealtyTrac, the leading source of
housing data, put U.S. foreclosures at their lowest levels in seven years. The
42-month national decrease had been momentarily interrupted by a 4% rise in March,
but even with that momentary hiccup, foreclosure rates were still 23% below
2013 levels. RealtyTrac calculates that there were just over 30,000 bank
repossessions in the U.S. in April—a slight uptick from the previous month, but
still a full 14% lower than a year ago.
·
One
Reason Why
Rising
prices mean that more people have positive equity in their homes. In the second
quarter of 2013, 2.5 million of the homeowners who’d been underwater found
themselves back in positive territory. As property prices continue to rise in
2014, more homeowners are moving out of the negative equity trap.
·
Many
Foreclosed-On Homeowners Still in Their Homes
Although
the 2007 downturn led to a surge foreclosures, many homeowners have stayed in
their properties. It’s estimated that currently half of all bank-owned
properties are occupied by either the original owner or the tenant.
·
More
Work for Investors
A
significant proportion of NOLA buyers in the post-2007 market were investors bold
enough to capitalize on bargain prices for properties. When national and NOLA
foreclosures decline, it indicates that fewer distressed properties will come
up for sale. That means more competition for them, and fewer acceptances for
lowball offers. Ultimately, it signals a shift toward more owner-occupiers.
·
Drop
Isn’t Everywhere
While
the national charts show a steady decrease in the number of foreclosures, the
trend is not universal. And there’s another reason investors can still find
some opportunities. The number of scheduled foreclosure auctions in the
judicial process hit the highest level in three years in 2013. This suggests
that, while fewer homes are falling into foreclosure, more of those in the
works are getting close to reaching the end of the line. It’s a painful
process, but when the smoke clears, will serve to help rebalance the real
estate market.
The drop in
foreclosures is a good indicator of the health of the current market. Rising
property prices and an improving economy mean that fewer homes are ending up in
the hands of the banks—news that all homeowners should be happy to hear. For an
update on the foreclosure activity in your NOLA neighborhood,
contact me today for a detailed property pricing report.
Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com
Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100
Each office independently owned and operated. All brokers licensed in the state of Louisiana.
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