Foreclosure Rates in Previous Boom/Bust Cycles

[BobbyD]

Has anyone seen an analysis or chart that compares what the foreclosure rates were during previous boom/bust cycles?

I was discussing this with some friends and I thought I had seen it on of the blogs. Let me know if anyone has come across any such analysis. It would be interesting to see what the percentage or number of foreclosure has been during these cycles and if there is a definitive trend and correlation to the boom/bust cycles. I am sure that there is some relation.

It would be interesting to see if the number of defaults now are in line with the past or exceedingly higher for where we are currently at in this cycle.

BTW, Dataquick shows that San Diego County Notice of Defaults is up 98.9% YoY.

County/Region  2005Q2    2006Q2    %Chg

Los Angeles      3,157      4,586       45.3%

Orange               697      1,280       83.6%

San Diego           894      1,778       98.9%

Riverside          1,121      2,287      104.0%

San Bernardino  1,093      1,839        68.3%

Ventura               250         452       80.8%

SoCal Totals:     7,212     12,222      69.5%

[powayseller]

BobbyD, you seem up to the task. Could you check with Dataquick or Ben Jones (housingbubbleblog and foreclosure blog)? You could also ask foreclosure.com. This would be an interesting figure. Just as we were awaiting the magical 22,000 inventory figure, the foreclosure number would give us a relative yardstick as well. I remember reading that a certain level of foreclosures is normal for any economy, and we are actually below that level due to the quickly rising home prices. Normal rates of foreclosures occur due to divorce, drug use, job loss, mental problems.

[tickets]

http://www.fdic.gov/bank/analytical/regional/ro20062q/na/2006_summer04.html

See Chart 5. This isn’t really what you wanted – it’s just the national figure, not local figures. But it’s still interesting at the national level. Mortgage charge-offs would have to double from the end of 2005 to reach the historical average (that shouldn’t take too much longer).

[Steve Beebo]

It doesn’t seem to make sense, but according to a new study by RealtyTrac, San Diego foreclosure activity dropped 7% from Q1 to Q2

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/08-09-2006/0004413120&EDATE=

[BobbyD]

Thanks all, I will see what I can find. Steve, my buddy sent me that article as well and that is what started us to get into this conversation.

[BobbyD]

Poway, what is the URL for the Foreclosure Blog? I emailed both Ben Jones and DataQuick.

[powayseller]

http://getforeclosures.blogspot.com/

“The largest monthly increases in new foreclosure rates among states with more than 300 new foreclosures were recorded in Alabama (up 21.3 percent); Colorado (up 12.9 percent); Illinois (up 11.6 percent); Michigan (up 38 percent); Minnesota (up 31.1 percent); Missouri (up 48.2 percent); and Ohio (up 14.3 percent).”

“‘New residential foreclosures across the nation are up this year, driven in large part by increases in adjustable-rate mortgages,’ said Brad Geisen, CEO.”

Interesting that the highest foreclosure rate increases are in the Midwest, and not in the bubble cities. Again proving that this housing bust is nationwide.

[bob007]

foreclosures in midwest have nothing to do with housing bubble – it is loss of industrial jobs. houses sell for 80-200k. folks who bought those houses were making 30-50k. it is not like they were stretching their budgets.

[no_such_reality]

You haven’t been to the midwest recently. In the bigger cities, those $100-$200K homes were $400, $500, and $600K.

Same bubble dynamics as here.

[powayseller]

The Midwest is seeing high foreclosure rates because people got loans they couldn’t afford. As interest rates increased, their adjustable loans became unaffordable. Flat wages and higher living costs are keeping buyers on the sidelines. A seller in Omaha, NE was on that city’s TV news, lamenting that not a single showing had occured in several weeks. This was so noteworthy, it made the news. The problem in Omaha, as in most of the country EXCEPT So CA, is overbuilding. Buyers have more choice, builders are giving away incentives. This is happening in Omaha. One of the 2 big builders in Omaha committed suicide in March due to his financial problems – he had 2 sets of financing from 2 banks; the banks did not run a title search…

Overbuilding, higher living costs, flat wages, and exotic loans are causing foreclosures nationwide.

What I hope everybody here realizes is that every property in this country is vulnerable to price drops, EVEN THOSE THAT JUST ROSE WITH INFLATION.

Prices in Omaha, NE have been rising with inflation for decades, not more than that. Yet inventory and foreclosures are rising and sales are down. Price drops will be next.

Omaha’s economy is very healthy, so there is not a problem with job loss causing any of this. They do have a lot of jobs that were added in construction, lending, and real estate, but my recent post about their job sector shows they are much more healthy than our SD economy. Even in Omaha, there is “a mortgage lender on every corner”, according to my friend who is a bookkeeper for 33 builders and realtors in Omaha.

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