Nevada’s foreclosure rate continues to lead the U.S., with one in every 35 homes having a foreclosure filing. But there was some good news out of the 2011 first quarter U.S. Foreclosure Market Report, released today by RealtyTrac.
In Las Vegas, activity declined 11.54 percent and 7.74 percent over the same periods. Nevada’s numbers were down 10.38 percent and 7.21 percent, respectively. “The slight declines in the Reno-Sparks foreclosure filings in the first quarter are, on the surface, positive indicators that the market is moving in the right direction,” said Brian Kaiser, housing and real estate analyst with the University of Nevada, Reno’s Center for Regional Studies. “The wildcard, though, is how much of that perceived improvement is related to the banks’ backlog?
“If the numbers are truly only down because the banks have not been able to deal with the backlog of properties — and there is certainly ample evidence that many of the banks are scrambling to find the proper documentation for loans made during the market’s bubble — then I would have to think this is just a temporary lull in the foreclosure storm.”
The backlog of filings was created by the improper filings lenders were using to foreclose on homes. From those “robo-signings,” lenders were forced to stop foreclosures on thousands of homes. Banks now are restarting the foreclosure process, which will add to the inventory.
Declining foreclosure percentages aside, it was the 51st consecutive month in which Nevada led the nation in filing activity.
Las Vegas had the highest foreclosure rate at one in every 31 households, and Reno was eighth at one in every 54 households. The national average is one in every 191 households.
“The foreclosure numbers are really tough to analyze over a short period of time because there are so many external factors that influence the timing of the filings,” Kaiser said. “It’s difficult to know if we are truly improving, or if we’re just seeing false improvements in the market because the banks are not able to keep up. Monthly variations are all over the place, and even quarterly variations are pretty wild many times.”
RealtyTrac CEI James J. Saccacio said the declines might be short-lived.
“The nation’s housing market continued to languish in the first quarter even as foreclosure activity fell to a three-year low,” he said. “Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers work their way through a backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork.”