Home repossessions on the rise, but could help property inventories

Foreclosure activity increased during the first six months of 2012 in a majority of the nation's largest metropolitan areas, which could be an indicator that the processes is beginning to ramp up after a halt last year.

Foreclosure activity increased during the first six months of 2012 in a majority of the nation's largest metropolitan areas, which could be an indicator that the processes is beginning to ramp up after a halt last year.

During the first half of the year, there were more foreclosures in 125 of the country's 212 largest cities than during the final six months of 2011, according to a report from RealtyTrac. Despite the increase, activity actually declined in 129 of the other markets from a year earlier.

However, one real estate expert argues the revival of the foreclosure process could help stabilize property inventories in some housing markets. 

"Increasing foreclosure starts in many local markets helped push total foreclosure activity higher in the first half of this year compared to the second half of 2011," said RealtyTrac CEO Brandon Moore. "Those foreclosure starts are welcome news for prospective buyers and real estate brokers in many local markets where a shortage of aggressively priced inventory has been holding up sales activity."

Meanwhile, the local markets that experience more home repossessions could see a subsequent rise in short sale and real estate-owned transactions in the coming months, Moore added.

On a state-by-state basis, California was home to seven of the metro areas with the largest increases in foreclosure activity. Specifically, Stockton, California, reported the highest repossession rate at 2.66 percent of total homes in the area, accounting for an estimated one in every 38 units during the first half of the year. Although Stockton had the highest rate of activity, foreclosure filings actually declined 13 percent from the final half of 2011.

Atlanta was another metro area that struggled to get home repossessions under control, the report said. As of June, a total of 46,267 homes in the area were in some state of the foreclosure process, which accounted for 2.14 percent of all properties - making it the city with the sixth-highest foreclosure rate. 

Fewer foreclosures in some areas

However, not every city experienced an increase in home repossessions during the the first six months of the year. In fact, property data indicates that the Seattle housing market saw the biggest improvement, as filings declined 28 percent from the final half of 2011. Other areas that saw decreases during this same period included San Francisco, Detroit, Los Angeles, Boston and San Diego.



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