From 24/7 Wall St.: According to data released last week, the worst effects of the housing crisis are beginning to wind down. RealtyTrac’s latest report shows the number of foreclosures in the U.S. in April is down 13 percent to 188,780 from 219,258 a year ago. However, some of the largest cities in the U.S. continue to lag behind the rest of the country, and still have long to go before the housing crash has fully run its course.
RealtyTrac published the number of new home foreclosures in April in the 50 largest metropolitan statistical areas in the U.S. Of those 50 areas, ten had more than double the national foreclosure rate, which is one out of every 698 new homes. In California’s Inland Empire metropolitan area, the rate was more than triple that. Using RealtyTrac’s foreclosure rates and and home price data from Fiserv Case-Shiller, 24/7 Wall St. reviewed the ten metropolitan areas with the highest foreclosure rates.
The continuing high rates of foreclosures in some areas is a disturbing trend, says RealtyTrac’s vice president, Daren Blomquist. Although the national foreclosure rate appears to have peaked, he explains, the massive number of remaining properties yet to be foreclosed may continue to hurt the U.S. market in the long-term. The large number of new foreclosures “means that distressed property sales will continue to represent a large portion of overall sales for at least the remainder of this year, which in turn will keep a lid on any robust home price recovery,” Blomquist says.
After reviewing the markets with the highest foreclosure rates, it is clear that regions with the most foreclosures to date are the ones worst affected by the housing crisis. Seven of the ten metro areas on this list had among the top ten largest declines in home value from their pre-recession peaks. In six of the ten regions, houses lost more than half their value in less than six years. In Las Vegas, home prices plummeted 61.8 percent between the beginning of 2006 and the end of last year.
While all ten metropolitan areas on this list have a high foreclosure rate compared to the national average, in some cities foreclosures have begun to decline, while in others they continue to increase. For example, Of these regions with the highest foreclosure, rates the number of new foreclosures fell by 44 percent in Phoenix and by 66 percent in Las Vegas in one year. Meanwhile, foreclosures rose 38 percent in Miami and 59 percent in Tampa.
24/7 Wall St. spoke with Trulia’s chief economist Jed Kolko. According to Kolko, while the overall decline in home prices is the major underlying force behind these areas’ high foreclosure rates, it is the legal system of the regions’ respective states that is affecting whether foreclosures are still rising or declining. Florida has a long foreclosure process, which involves the courts on many occasions, while Nevada’s process is much shorter and non-judicial. Florida is therefore far behind in liquidating its foreclosure inventory, while Nevada is far along the process.
24/7 Wall St. examined RealtyTrac’s latest foreclosure figures of new homes for April, 2012, as well as the changes in the number of new foreclosures from a month prior and a year prior. In addition, we reviewed historical, current, and projected home price changes, provided by Fiserv-Case Shiller.
These are the ten cities with the most homes in foreclosure, according to 24/7 Wall St.