John Evan Miller: How Baltimore and Md. stack up on foreclosures
Today, guest poster John Evan Miller -- who writes for the ForeclosureDeals blog -- brings good news and bad news about foreclosures in our area. He's been writing about real estate for years and has a graduate certificate in international real estate.
Take it away, John:
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Those of us who have been in the real estate industry for any significant amount of time know one thing about today’s market: It’s a mess.
Across the country, from Maine to California (and even Alaska and Hawaii), the real estate market has been besieged by successive waves of foreclosures that have decimated neighborhoods, depressed home values and sent millions of Americans searching for new living arrangements.
How does the state of Maryland – and the city of Baltimore – stack up when compared to foreclosures in the rest of the country?
First, the good news. A review of available data reveals that the situation is not as dire as it is elsewhere in the country. Nevada, for example, has by far the highest foreclosure rate, with one out of every 118 housing units receiving a foreclosure notice in September. In contrast, according to the state Department of Housing and Community Development, Maryland’s foreclosure rate was a relatively-small one out of every 720 housing units – good for the 9th best rate in the country.
Overall foreclosure activity also declined by a remarkable 27.9 percent from June to September across the state. In Baltimore, foreclosure filings have fallen three straight months, with 144 filings issued in the month of September. Right now, the city has a foreclosure rate of one out of every 2,046 housing units, with 1,287 foreclosed homes for sale at the moment. That is good for approximately 15.6 percent of all foreclosures in the state.
That’s the good news. Now, we will take a look at the weaknesses in the Maryland and Baltimore housing markets that could persist throughout 2012.
While foreclosure activity fell in Baltimore and Maryland for the quarter, and remain lower than the national average, foreclosure filings increased dramatically from August to September, climbing by 31.1 percent. There were 3,251 foreclosure events from June to September, which counts notices of default filed, foreclosure sales and lender purchases. That number is lower than the second quarter’s figure, but is still the second-highest total this year.
One major reason – perhaps the reason – behind the quarterly decrease is simple: Lenders in Maryland, like elsewhere in the country, have refrained from filing for foreclosure as a result of the robo-signing and foreclosure processing controversies that rocked the industry last year. The state of Maryland also instituted a foreclosure mediation program last year, but participation has been so low that the decline is probably not related to the program.
Falling unemployment is another potential reason for a decrease in foreclosures, but in Maryland and Baltimore, that isn’t the case. Unemployment actually increased in Maryland in September from 7.3 percent to 7.4 percent. Baltimore continues to have a higher-than-average unemployment rate of 10.4 percent. In essence, the decrease in foreclosure filings reported is more than likely due to banks momentarily halting their processing.
What happens when banks start foreclosing on homes again? The short answer is this: You can expect to see more foreclosures for sale in the market – which means Maryland’s foreclosure rate will increase along with most states in 2012.
How soon that will happen – and the severity of the next foreclosure wave – is unsure at this moment. Unless something changes soon, though, Baltimore and Maryland will likely see their respectable national rankings in foreclosures increase for the foreseeable future.
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Thanks, John!
Thoughts, questions, arguments? Comment away.
If you'd like to write a guest post -- either to share expertise or to share an interesting housing-related personal experience -- please drop me a line. Details here.
And if you've got questions you'd like to see a guest poster address on another subject, ask away right here.
Categories: Guest post, The foreclosure mess
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Comments
As a foreclosure prevention counselor with a non-profit agency in northwest Baltimore, I would have to agree with this blog 100%. I would also add that another reason for the slow up is that servicers are dealing with so many borrowers whose properties are under water that they (servicers) are reluctant to add to inventory that is not moving and probably hoping as borrwers are, for an improvement in the economy.
Posted by: Chesca Stein | November 7, 2011 9:54 AM
Great article John, i agree 100%!
Baltimore has potential to become a great place for future investments
Posted by: Tom | November 7, 2011 12:06 PM
Now is the time to buy a home. Who cares if foreclosures go up in the future? BUY BUY BUY skidaddy. BOOYAH
Posted by: Jim Cramer | November 8, 2011 1:23 PM
Great article! Heres to hoping the real estate industry does a complete 180...soon!
Posted by: Brandy Danielson | November 9, 2011 4:43 PM
Um Brandy- Why exactly would you be rooting for an increase in home values? So we call all pay more money on housing? A return to what got us into this mess? I smell realtor logic.
Question- Can a realtor ever simply just assist people with selling houses without using the investment con angle?
Posted by: elweedz | November 10, 2011 8:07 AM
@elweedz – I can see your logic on not wanting to pay more for housing. However, the economy needs inflation to be growing. If home prices were falling, then why would anyone want to buy one? An asset that increases in value is what everyone is looking for.
I am actually not a Realtor and I do not sell houses. I work in commercial real estate, and if we were to show a client an investment that was not increasing in value the investor would pass.
Posted by: Brandy Danielson | November 14, 2011 11:33 AM