Foreclosure rates offer tremendous opportunities for real estate investing. It comes down to knowing how to identify the hottest foreclosure markets, together with the ones that provide the most significant possible profit. As foreclosure rates are constantly fluctuating, keeping a close watch on these trends is essential for long-term success.
Statistics and Foreclosure Trends
Midway through 2018, foreclosure starts are continuing to fall, but 40% of local markets see a rise in the rates. ATTOM Data Solutions’ Midyear 2018 U.S. Foreclosure Report identified 362, 275 properties with foreclosure filings in the U.S.
Not all of those filings result in foreclosure – the report also included scheduled auctions, default notices, and bank repossessions in the count – but the filing rate is a reliable indicator of both future and present foreclosure rates.
The report also listed three states that registered the steepest foreclosure rates in the country, namely Maryland (3rd), Delaware (2nd), and New Jersey (1st).
At the end of last year, Maryland registered a 0.95% foreclosure rate, which translates to one for every 1, 0689 houses in the state. In addition, Baltimore had the highest number of distressed home sales out of all cities in the U.S. at 20.7% of sold house falling under distressed sales.
Distressed sales include bank-owned properties, short sales, and foreclosed properties, which fall outside the regular real estate market. This type of sale typically means negative market health.
However, it’s not all bad news for Maryland – while the foreclosure is still at elevated levels, a decline is being observed. Furthermore, Maryland is considered a judicial foreclosure state. Since the foreclosures still have to go through the court system, the distressed sales trends are still expected to change.
By February of this year, one out of every 1, 012 homes in the state were considered a foreclosure. However, there’s a more complicated story behind the numbers.
Delaware is still trying to recover from the 2008 recession, and doing at a slower pace than other parts of the U.S. The damage from the recession manifested in loss of home equity and a more challenging landscape for any real estate investment group. Housing inventory is also low, and it’s a difficult time for first-time home buyers as well.
Like Maryland, however, there’s still a positive spin on Delaware’s unfortunate ranking. Foreclosure rates are still lower by 35% compared to the same period last year, and February filings were lower than those of the previous month.
THIRD: New Jersey
The Garden State is home to the nation’s highest foreclosure rates. One in every 605 properties is currently in one stage or another of foreclosure, clocking in at 1.615 foreclosure rate. New Jersey’s Cumberland, Atlantic, Salem, Sussex, Burlington, Gloucester, and Camden have the worst rates in the U.S.
Worse, New Jersey’s bank repossessions skyrocketed to an 11-year high, in stark contrast to an 11-year low for the rest of the United States.
There’s still some reason for optimism: as a whole, New Jersey saw foreclosure starts numbered at 21, 274 properties in 2017. That’s a lower rate of 23% from last year. This means that fewer people are getting late on their mortgage payments.
Compared to these three states, Indiana is still relatively healthier in terms of foreclosure rates. If you’re interested in making a foreclosure market, being a member of a real estate investors association will be invaluable in helping you keep tabs of promising trends and leads.