Counting foreclosures, more or less
Foreclosures nationwide more than doubled in March, according to a count by RealtyTrac. The company reported 51,393 bank reposessions last month, compared with 22,491 reposessions -- the final stage in the foreclosure process -- during the same month last year.
Of course, the number is wrong. For example, it includes zero Massachusetts foreclosures. That's right: None. Which I regret to report is not the actual number of foreclosures in Massachusetts last month.
Truth is, foreclosures are very hard to count. As the Los Angeles Times noted a few months ago, "Foreclosure is popularly understood as an event. . . Yet, foreclosure is really a process, one that can stretch over a year and vary from state to state." Furthermore, record-keeping on foreclosures in most states was historically and largely remains completely abysmal.
Assuming the state has any kind of foreclosure records, which many states do not.
"No one is measuring the truth," Mark Zandi, chief economist for Moody's Economy.com, told the Times. "This is a problem when formulating policy."
We in Massachusetts are extremely lucky to have precise data from Warren Group.
The RealtyTrac answer is to overcome differences among states by reporting the number of homes that are at any stage in any state's foreclosure process. That number is up 57 percent over last year, and the company says one in every 538 U.S. households is at some stage in the foreclosure process. (On that basis, 1 in 486 Massachusetts household is impacted, up from 1 in 750 last March.)
There's lots of problems with this methodology. But since it's stable, perhaps it shows a valid trend. And perhaps it shows how states compare to each other. In which case, perhaps it's true that Massachusetts is pink.
You want certainty? Read a newspaper.
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Hmmm, so more evidence that the downward trend will continue. Although I think the concept that has stuck with me most after reading these posts is that the Mass. market is so heterogeneous that one has to make a decision on buy/sell without being able to just look at the trends and feel secure in what they're reporting. What's happening in Big Town A just may not be a way to gauge the landscape in Little Town B.
Oh, Mr. Appelbaum, I humbly beseech you, as a writer: please don't use "impacted" like that unless you're in the military, or a dentist. "On that basis, 1 in 486 Massachusetts household is *affected*, up from 1 in 750 last March." would work. (Yes, I'm one of those, who can't stand seeing people write "loose" when they mean "lose", etc. These things become commonly used after a while.)
while I agree with loose/lose, and the general point, is impacted really so bad?
Foreclosures will continue to get worse, clearly, until the overhang of unaffordable loans and resets is digested. This will likely last through 2008 as foreclosure lags the point people stop paying, by up to 6 months.
And people usually try to stay in their houses, scrabbling to make each payment long after its clear things aren't going to work (granted this looks a little different in the current crisis)
The upshot is that foreclosures lag pain in the market significantly - the march reset will be showing up in the foreclosure rates months from now.
Foreclosures also go in a bell curve/wave after each reset event, something a lot of commentators misunderstand. They will say foreclosures are dropping, which is true, but ignores the cyclical nature of the beast.
Well, I think so, but then I also can't stand it when people I work with say things like "let's leverage the work you've already done" when there's already a perfectly good verb available; someone decided that sounds more intelligent than "let's lever off of the work you've already done".
I won't be looking at foreclosed homes when I decide to buy, but what you say about them lagging is interesting and I appreciate the info.
JChristian,
Thanks for the note. It strikes me that something affected is dented less deeply than something impacted. They're both good verbs, just in different shades of gray.
This blogger might want to review your comment before posting it.
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