Foreclosure notices – an ongoing barometer of stress in the housing market – have slipped to levels last seen two recessions ago, despite an uptick this month.
In the 13-county metro Atlanta region there were 2,083 notices, up from 2,066 in October but down from 2,928 during November 2013, according to a report Monday from Kennesaw-based Equity Depot.
More tellingly, the region has seen 25,343 foreclosure notices this year – 47 percent fewer than during the same period of last year and the fewest since 2001.
The area’s real estate recovery has been very uneven, with south side neighborhoods often lagging, but overall, the drift continues toward health, said Josh Moffitt, president of Atlanta-based Silverton Mortgage Specialists. “We are back to seeing more traditional buyers and sellers. We are returning to a more standard market.”
November notices are for auctions on county courthouse steps that would take place the following month. But many foreclosure notices do not get that far and many – perhaps most – do not end with the loss of a home.
Equity Depot has estimated that roughly half of properties whose owners get notices end up being sold.
Whatever the outcomes, the number of notices is seen as a measure of stress in housing, as well the economy: The more notices, the more owners having trouble making their monthly mortgage payments. Sales of property that banks have taken back from delinquent homeowners are down dramatically, Moffitt said. Last year, one in five of the mortgages Silverton was handling were in that category. “This year we are at 5 percent or lower.”
That means that in most parts of the region, foreclosures are no longer dampening prices.
A big wild card going forward is the “shadow market” of homeowners who are in default on mortgages that have not been pushed into foreclosure.
“There’s an unknown number of properties in default that the banks don’t want to process through foreclosure,” said Mike Watkins, founder and CEO of Atlanta-based Verifyd, which sells mobile apps – and maintains databases – now used for more than half the foreclosures in the state.
Perhaps the home values in their area are depressed. Or the bank doesn’t think it can sell the property and prefers not to have the financial responsibility for it.
“They are called ghost foreclosures, and I have no idea what the number is,” Watkins said.
Additionally, hedge funds and other huge institutions scooped up thousands of metro Atlanta properties in the past several years. All those properties eventually will come back on the market, but lenders have no reason to hurry until prices rise further, he said.
Watkins thinks the improvement in the market will slow. “I don’t see much change on the horizon,” he said. “I would say it has leveled out.”
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