Foreclosure Activity Gets Ugly in First Half - 24/7 Wall St.

A day after the Commerce Department said?sales of new homes fell 8.4% last month from May to a seasonally adjusted annual rate of 350,000, real estate research firm RealtyTrac reported that first half foreclosures marked another sign that the housing recovery has barely materialized at all. The sector?s turnaround is well in the future.

Realtytrac?s?Midyear 2012 Metropolitan Foreclosure Market Report showed that foreclosure activity in the first half of
2012 increased from the previous six months in 125 of the nation?s 212 metropolitan areas with a population of 200,000 or more.

The markets that have been most troubled since the home price peak of 2006 continue to be the most troubled. Many are areas of high unemployment, so they lack the key to improvement.

Stockton, Calif., posted the nation?s highest metro foreclosure rate: 2.66% of housing units (one in every 38) with a foreclosure filing in the first half of 2012, Realtytrac reported. That is more than three times the national average. The city filed for bankruptcy earlier this month.

The list?was burdened?by financially troubled cities in central California, many of which are included?in the Realtytrac?list of the 20 cities that suffered most from foreclosure rates in the first half. Among these were Modesto, Riverside, Vallejo-Fairfield, Visalia-Porterville, Bakersfield, Sacramento, Ventura and Fresno. It is unimaginable that so many of the most?blighted cities should be concentrated in such a small section of the United States.

Florida has six cities on the list. The worst among them based on foreclosures?was Orlando. Of course, long-suffering Las Vegas is on the list as well.

The RealtyTrac?data are a reminder that all real estate problems remain local. The cities with high foreclosure rates also have high unemployment rates and are among municipalities with the most troubled finances. Low tax bases have strained their budgets and, in many cases, caused a drop or elimination of essential services. Many of these cities will not find money to pay pensions and health care benefits to current and retired municipal employees.

It is hard to make the case in Washington that some regions should get more real estate aid than others. Nearly every member of Congress believes his or her district should not be?slighted. Because there is no substantial?aid for the cities that need it to recover, these will not recover ? in terms of housing and employment ??for years, perhaps decades.

Methodology: 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).

Douglas A. McIntyre

Source: http://247wallst.com/2012/07/26/foreclosure-activity-gets-ugly-in-first-half/

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