Reports show state’s housing crisis isn’t over
Foreclosure rate is still among the highest in the country.
(As seen on WZZM TV 13) Michigan is among the worst states when it comes to foreclosures and distressed sales, according to two recent reports from CoreLogic.
The national foreclosure report, which looks at data for November 2015, saw the overall number of foreclosures down from the previous November, from 41,000 to 33,000. The 33,000 completed foreclosures is a 71.6 percent decrease from when foreclosures were at their peak in September 2010.
“After peaking at 3.6 percent in January 2011, the (national) foreclosure rate currently stands at 1.2 percent — a remarkable improvement,” CoreLogic Chief Economist Frank Nothaft said. “While there are still pockets of areas with high foreclosure activity, 30 states have foreclosure rates below the national average, which is evidence of the solid improvement."
Michigan is one of those pockets of foreclosure activity and saw an increase in non-judicial foreclosures in the 12-month period stretching to November 2014. The Mitten State saw 50,766 complete foreclosures in the 12 months ending in November 2015, following a year that saw 47,114.
The nation as a whole saw 483,335 foreclosures in the year ending in November 2015, down from 607,826 in the year prior. Since the financial crisis started in September 2008, the United States has seen nearly 6 million homes lost to foreclosure.
Only Florida with 83,000 had more foreclosures in 2015 than Michigan. Five states — Florida, Michigan, Texas, California and Georgia — accounted for nearly half of the nation’s foreclosures last year.
Many of the foreclosures are finalizations of foreclosures dating to the financial crisis, said David Allen, executive director of the Kent County Land Bank Authority.
“A good portion of them are on the east side of the state and (represent) the last remains of the crash,” Allen said.
Michigan’s serious delinquency rate, defined as 90 days or more past due, is 2.3 percent, a 26.6 percent decrease from the year before. As a nation, the U.S. saw its delinquency rate decline by 21.7 percent and is the lowest rate since December 2007 at 3.3 percent.
"Tight post-crash underwriting standards coupled with much improved economic and housing market fundamentals have combined to push new mortgage delinquencies to 15-year-lows," CoreLogic CEO Anand Nallathambi said. "Although judicial states will likely continue to lag, given current trends, it is reasonable to expect a continued and significant drop in the rate of serious delinquencies and foreclosure starts in 2016."
CoreLogic also released a report recently citing distressed sales, real-estate owned and short sales accounted for 11.9 percent of home sales in November 2015, down nearly 2 percent from November 2014.
At the peak of the financial crisis in January 2009, 32.4 percent of sales were distressed, according to CoreLogic.
The report cites that distressed sales are important to clear the foreclosure inventory, but they can also pull down the prices of non-distressed sales.
Michigan was among the states with the highest distressed sale shares, which was led by Maryland at 20.2 percent. Connecticut and Florida both were at 19 percent with Michigan at 18.9 percent.
Michigan will see an increase in foreclosed houses back on the market before long, and the KCLBA will act as a conduit for the sale, helping get them to the market as quickly as possible, Allen said.
He said many of the homes are snatched up at the lower price and then fixed up, with about 75 percent of buyers staying as the homeowners.
“A lot of people want that inventory,” Allen said. “Some people pay cash for them, fix them up and make them home.”