Foreclosure notices stay consistent at pre-crisis levels

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WHY IT MATTERS

Foreclosures can hurt home values, which are important even to people who aren’t likely to sell or buy anytime soon. Home values contribute to the so-called “wealth effect” that helps drive the broader economy by making people more confident about purchases of all types.

Metro Atlanta foreclosure notices through October

Year…..Number…..Percent change

2006…..37,290…..up 21.3 percent

2007…..48,121…..up 29 percent

2008…..66,924…..up 39.1 percent

2009…..97,339…..up 45.4 percent

2010…..103,603…..up 6.4 percent

2011…..91,440…..down 11.7 percent

2012…..80,176…..down 12.3 percent

2013…..44,935…..down 44 percent

Source: Equity Depot

For three consecutive months, metro Atlanta’s foreclosure rate has dropped to levels not seen since 2006, prompting housing experts to declare an end to the mortgage crisis that has rocked the region.

And the vast majority of October foreclosure notices aren’t being advertised for the first time — but for the second, third or even sixth — meaning that even fewer new people are entering the foreclosure process.

“People are doing better, and fewer people are going to lose their home to foreclosure,” said Mike Alexander, research and analytics division manager at the Atlanta Regional Commission. “If new foreclosures are going down, that’s a great thing. It’s a good indicator of a stabilizing housing market.”

There were 3,915 October notices — newspaper advertisements that presage foreclosures — up 8.8 percent from September. This advertisement period has an extra week in it, giving lenders more time to advertise their notices. Longer periods typically go up more than that, said Barry Bramlett, whose Equity Depot in Kennesaw compiles the numbers. The October figures are 49.4 percent lower than they were last year.

“It’s low, it’s definitely low,” Bramlett said. “It’s very consistent. It’s plateaued back to pre-crisis levels.”

Foreclosure notices have been decreasing since 2010, when 127,140 notices were filed in the 13-county region. So far this year, 44,935 notices have been filed —- down 44 percent from the same period in 2012.

Bramlett said there’s no indication that notices will again rise. And with repeat notices making up 72 percent of all notices, he said the number of new cases facing foreclosure should continue to diminish.

A year ago, 40 percent of foreclosure notices were running for the first time.

“The percent of new cases is really a low amount,” Bramlett said. “You can surmise from that that the foreclosure rate has dropped down.”

Bramlett said some lenders have a tendency to stop and start the process many times, which leads to old foreclosure notices appearing multiple times without a property being foreclosed on.

Fewer new notices translates into fewer foreclosures as the number of owners in trouble continues to drop, said John Hunt, a senior analyst with the real estate analysis firm Smart Numbers. As the number of new foreclosures continues to dwindle, home prices will keep rising, bringing more people out from underwater and encouraging them to put homes up for sale, or invest more in their property. In July, prices were up 18.5 percent year-over-year according to the widely watched S&P Case-Shiller Home Price Index. It was the eighth straight month of double-digit growth.

Hunt said he keeps hearing about banks that are holding back property to foreclose on later, perhaps to keep the properties off their balance sheets, or to take advantage of rising prices. But he said he has yet to see it.

“The pipeline has been shut off,” he said. “At some point, you have to get to the end of it. We’re at the end of it.”

Those that are still being foreclosed on, he said, are likely those who “have been in the mire for a while.”

But some still expect an uptick in foreclosures. Eugene James, Atlanta regional director of the housing information company Metrostudy, said he expects to see numbers rise as banks clear their books of delinquent properties before the end of the year.

Still, James said the consistent lower numbers are good for the housing market, which continues to show signs of strength.

Slowly, Alexander said, the region is returning to normal.