A housing mess of historic proportions rolled on unabated in the second quarter, pushing foreclosure filings up 14 percent from first quarter totals, and more than doubling year-ago totals. Foreclosure filings were reported on 739,714 U.S. properties during the second quarter, a 121 percent increase from the second quarter of 2007, according to property information service RealtyTrac.
Perhaps the more troubling news is that the foreclosure phenomenon is spreading beyond so-called bubble states.
"Although much of the fallout from foreclosures is being driven by rampant activity in a few states, such as Nevada, California, Florida, Ohio, Arizona and Michigan, most areas of the country are seeing at least some increase in foreclosure activity," said James J. Saccacio, chief executive officer of RealtyTrac. "Forty-eight of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter."
Bank repossessions accounted for 30 percent of total foreclosure activity in the second quarter, up from 24 percent of the total in the first quarter, RealtyTrac said. The company's data found 222,391 REO properties listed for sale at the end of the second quarter.
"This shift in the distribution of activity indicates that there is a progression toward purging the problem loans out of the system -- at which point the housing market can regain some sense of normalcy," said Saccacio. "Of course if another surge in defaults occurs, which could well happen later this year, it would refill the foreclosure pipeline and prolong the recovery."
Most experts expect another surge in defaults as a huge total of outstanding option ARMs begin to recast in the early part of next year; that's to say nothing of a weakening economy, which tends to drive up borrower defaults for much more traditional reasons.
RealtyTrac vice president Rick Sharga told MarketWatch radio Friday morning that foreclosures are tracking to top three million households this year alone.
The usual suspects still dominate
And while an uptick in foreclosures is becoming widespread, California and Florida continued to dominate activity during the quarter -- metro areas in those two states alone accounted for 16 of the top 20 metro foreclosure rates, with the California cities of Stockton and Riverside-San Bernardino taking the No. 1 and No. 2 spots in RealtyTrac's data.
One in every 25 Stockton households received a foreclosure filing during the quarter -- nearly seven times the national average -- and one in every 32 Riverside-San Bernardino households received a foreclosure filing during the quarter, more than five times the national average. Other California metro areas in the top 20 were Bakersfield at No. 4, Sacramento at No. 5, Oakland at No. 8, Fresno at No. 9, San Diego at No. 11, Orange at No. 15, Ventura at No. 16 and Los Angeles at No. 19.
Las Vegas documented the third highest metro foreclosure rate, with one in every 35 households receiving a foreclosure filing during the quarter. Foreclosure filings were reported on 21,742 Las Vegas metro properties during the quarter, up more than 25 percent from the previous quarter and up nearly 144 percent from the second quarter of 2007.
The highest ranked Florida metro area was Fort Lauderdale, which ranked No. 6 with one in every 51 households receiving a foreclosure filing during the quarter. Other Florida metro areas in the top 20 were Miami at No. 10, Orlando at No. 13, Sarasota-Bradenton-Venice at No. 14, Tampa-St. Petersburg- Clearwater at No. 17 and Palm Beach at No. 18.
One in every 51 households in the Phoenix metro area received a foreclosure filing during the quarter, ranking No. 7; one in every 66 households in the Detroit metro area received a foreclosure filing during the quarter, ranking No. 12; and one in every 91 households in the Atlanta metro area received a foreclosure filing during the quarter, ranking No. 20.
For more information, visit http://www.realtytrac.com.