Foreclosure postings up

No surprise in that headline, right?  Mortgage defaults and foreclosures are up nationwide, but there are stark differences from region to region and from metro to metro.  Bloomberg reports that Arizona, Nevada, California, and Florida continue leading in terms of percentages of households posted for foreclosure in January 2010:

U.S. Foreclosure Filings Top 300,000 for 11th Month

Arizona had the highest rate of foreclosures, with 1 in 95 households posted (1.05%).  California and Florida tied at 1 in 187 households (0.53%)

I have talked and blogged for a very long time about the relative strength of the Austin area, but I have also noted that we have not been completely immune from the effects of the recession and housing downturn.  Annual counts show the increase in foreclosure activity here:

Foreclosure Sales vs. Total Sales, Austin-Round Rock MSA

Over the past five years, foreclosures sold as a percentage of total residential sales ranged from 4.4% in 2005 to 11.5% last year — more than 2.5X!

The change is a little less shocking when monthly foreclosure sales are considered:

Monthly Foreclosure Sales, Austin-Round Rock MSA

Clearly, there was a concentration of foreclosures sold in 2009, but there were a number of months in 2006 and 2007 in which the number of foreclosure sales approached what we experienced last year.  Total sales in those years were much higher (26,000 and 24,000, respectively, versus 18,000 in 2009), so as a percentage last year was much worse.  But let’s put all of these numbers into perspective, comparing to areas where the housing downturn has taken its worst toll:

The Austin MSA had approximatelyl 600,000 households in 2009.  A little less than 2,100 foreclosed properties — 0.35% — were sold last year.  That’s about 1 in 286 households — about 1/3 the rate in Arizona, and only 2/3 of the rate in California and Florida.  Stated another way, if our foreclosure rate matched Arizona’s we would have seen 6,300 last year, not 2,100!

Sadly, most analysts believe that nationwide we are only 1/3 or so through the total number of foreclosures that will take place before we fully recover.  Austin is still in a much better place than the states that saw the most serious declines in home values over the past couple of years.  Here too, though, this problem will likely get worse before it gets better.