Hmmm where'd they get that number?
You all know I'm a self-professed data geek, right? I recently read an article in the Portland Business Journal about the spike in foreclosures in Oregon. As I read it, I was stymied. (That's my big word for the day today, by the way. I'm a data geek remember, not a writer)...
Most of you know that I track and have written about our Salem Oregon area foreclosures on several occasions. In the article it stated:
Salem ranked No. 64 with 1,724 actions, affecting one in every 69 households.
This statistic quoted refers to foreclosure actions as stated by RealtyTrac. What left me staring at the computer screen and scratching my armpit head, you ask? Well that 1,724 number for starters. That number isn't even close to what I have in my database. As I struggled to figure out what the difference was, I got it. As I got it, I realized that while RealtyTrac has a consistent methodology which is important for analysis, I question the way in which they look at the data…and here’s why…
It’s not unique.
What am I talking about? Anyone who has an online presence tracks unique visitors. We don’t care that we had 10,000 hits if only 3 people caused them. Most of us would jump up and down and go whoo! hoo! 10,000 hits...What!!!! Only 3 people. That stinks.
What you need to know is that RealtyTrac isn’t reporting unique, at least not for my area. So if you live at 123 Main street and get served with a notice of default by lien holder #1, one by lien holder #2, AND then it becomes bank owned, RealtyTrac, in theory, counts this as 3 separate notices…for one property. So what this does it make the data seem astronomically high.
I read the fine print today for RealtyTrac
Report methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the first six months of 2009. Data is also available at the individual county level and MSA level for Midyear 2009, Q2 2009 and June 2009. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the month or quarter, only the most recent filing is counted in the report.
Now I don't know about other areas, but in Salem Oregon...I haven't seen a notice of default filed AND the house become an REO in the same month or quarter. Our law requires a minimum of 90 days between notice of default and auction so many notices fall into separate quarters. So how many unique properties were served with a foreclosure notice in Salem Oregon MSA (all of Marion and Polk counties) in the first half of 2009?
979 according to the data I get from Fidelity National Title here in Salem Oregon. That is a difference of 745. If you don’t read the fine print about how they report their data, you would think that there are 43.2% more unique distressed properties somewhere out there in the Salem Oregon MSA. They’re aren’t…at least not according to the information I get.
So if you are bargain hunting out here in the Salem Oregon metro area you can be assured that yes indeed, foreclosures on on the rise here, but if you are having trouble figuring out where all of those RealtyTrac short sales are, you just need to know that they may count the same houses twice in their data.
;)
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Melina,
thank you for taking time to dissect the statistical data. You know, there is some magic in statistics and we tend to trust it without often asking ourselves the questions that you have asked.