RealtyTrac Releases 2010 Metropolitan Foreclosure Market Report

RealtyTrac released its annual year-end foreclosure report, and there was a mix of positive and negative news.  In 149 of the country’s 206 major metropolitan markets (areas with population of 200k or more), foreclosure activity was up compared with 2009.  However, the 10 highest foreclosure areas all reported a decrease in foreclosure activity from 2009.  Further, 6 of the top 10 also posted a decrease in foreclosure activity compared to 2008.

Of course, a decrease in foreclosure activity is not necessarily “good news.”  It’s like telling your wife her cooking is “less bad” than it was the year before.  Try that and see what sort of response you get.  And 2010 foreclosure activity was temporarily halted at some banks by the robo-signing fiasco.

While some of the hardest hit areas (Nevada, Florida, California, and Arizona) reported “less bad” news, other major cities were not as fortunate.  The foreclosure virus strengthened its grip in areas like Houston (up 26% since 2009), Seattle (up 23%), and Atlanta (up 21%).

These numbers shouldn’t come as a surprise, but instead show the realities of today’s markets.  Hard-hit areas are still dealing with foreclosure inventory from the past several years, so any new foreclosures just add to the surplus of supply.  In areas that were relatively spared for the first couple of years of the downturn, foreclosures and short sales are now commonplace.

Working through the inventory will take some time.  But the best way to deal with foreclosures is to prevent them. Attorneys and real estate professionals working to prevent foreclosure are now more than just a niche.  Short sale specialists and investors provide options for underwater homeowners.  But sellers need to be proactive and discuss their options with an attorney as soon as possible.  Once the foreclosure sale date has been set, it is often quite difficult to postpone it.

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