Wednesday, June 1, 2011

Foreclosures continue to wane

Posted By on Wed, Jun 1, 2011 at 9:07 AM

The worst may be over for foreclosures in El Paso County, according to the May report from Public Trustee Tom Mowle.

He says in a release that foreclosure starts are running at about two-thirds of last year's numbers, and for the fourth month in a row, fewer than 300 foreclosure starts were recorded. The three-month total is the lowest since February 2007. That prompted Mowle to forecast the 2011 total to be the lowest in four years.

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His release:

While it is a bit too early to say for certain, it also appears that fewer foreclosed properties are being taken all the way to auction by the lenders. The number of cured defaults for the year is running a third higher than last year, and withdrawn foreclosures are nearly keeping pace with last year — even though there are fewer foreclosures to be cured or withdrawn.

A final sign of good news is an increase in the share of properties purchased by third party investors, rather than by the banks. 23 of the 159 sales in May (14.5%) went to third parties, above the 10% which had been typical for many months. Interest in redemption of properties is also increasing; taken together these suggest that investors are more optimistic about their own situation and the future of the local housing market — or, maybe the lenders are just getting more savvy about their initial bids. After all, a property at 935 E. Cimarron was bought by an investor for only $300.

Unfortunately, the good news on the foreclosure side is not matched by good news regarding private party home sales. Only 2216 deeds were released in May, the lowest total since February 2010. The monthly average is still running a bit ahead of last year, and the year-to-date total is well ahead of last year, but last year was the worst year for releases since 2001. A local housing recovery is in the future, not the present. The drop in foreclosures, however, is the first step to making that recovery possible.


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