Foreclosures Continue to Climb in Q1

RealtyTrac released its U.S. Foreclosure Market Report for the first quarter of 2009 on Thursday, which showed that one in every 159 housing units in the nation received a foreclosure filing during the first three months of the year. Total foreclosure filings — including default notices, auction sale notices, and bank repossessions — were reported on 803,489 properties, a nine percent jump from the previous quarter and an increase of nearly 24 percent from the first quarter of 2008.

The month of March saw a record level of foreclosure activity — the number of households that received a foreclosure filing was more than 12 percent higher than the next highest month on record, RealtyTrac said. Nationwide, foreclosure filings were reported on 341,180 properties in March, a 17 percent increase from the previous month and a 46 percent increase from March 2008.

Much of this activity was in new foreclosure actions, suggesting that many lenders and servicers were holding off on executing foreclosures due to industry moratoriums and in anticipation of the new government housing programs. Bank repossessions (REOs) actually decreased based on RealtyTrac's market data, down 13 percent for the quarter and 3 percent from February to March. However, RealtyTrac warned that we'll likely see REO numbers start to rise as the backlog of foreclosures begins to wind through the process.

The March and Q1 numbers were the highest monthly and quarterly totals since RealtyTrac began issuing its report in January 2005.

RealtyTrac's CEO James Saccacio offered a positive note in the midst of the dismal numbers. “It appears that demand is up in some of the harder-hit areas, particularly on bank-owned REO properties that first-time homebuyers and investors see as bargains,” Saccacio said. “But it’s unlikely that this increased demand will be enough to offset the growing number of foreclosures in the pipeline, accelerated by rising unemployment rates.”

Nevada continued to document the nation’s highest state foreclosure rate in the first quarter, with one in every 27 housing units receiving a foreclosure filing — more than five times the national average. Total foreclosure filings in the state increased by 19 percent from the previous quarter. Bank repossessions in Nevada were down 3 percent, but defaults increased 27 percent and auction sale notices increased 35 percent. On an annual basis, Nevada's foreclosure activity in Q1 was up nearly 111 percent.

Arizona posted the nation’s second highest foreclosure rate for the first quarter of the year, with one in every 54 housing units receiving a foreclosure filing. California came in at No. 3, with one in every 58 homes in foreclosure.

Other states with foreclosure rates ranking among the top 10 in Q1 were Florida, Illinois, Michigan, Georgia, Idaho, Utah, and Oregon.

Five states – California, Florida, Arizona, Nevada, and Illinois – accounted for nearly 60 percent of the nation’s foreclosure activity in the first quarter, with 479,516 properties receiving foreclosure filings among them.