Recent years have witnessed the U.S. housing sector experience a myriad of fluctuating market conditions; many of which have forced homeowners into an economic lull with heightened foreclosure rates. However, progression of the economy and certain market indicators suggest that we are in a sustainable period of recovery.
Housing markets across the country are removing themselves from what appeared to be a perpetual state of decline. Of particular concern, however, are select regions that have yet to partake in the path to recovery. While the majority of markets have taken significant leaps forward, others have yet to benefit.
According to RealtyTrac, several unexpected states experienced double-and-triple-digit foreclosure rate increases. The states reporting significant increases are as follows:
- Maryland (275% increase from previous year)
- Oregon (137% increase from previous year)
- New Jersey (89% increase from previous year)
- Rhode Island (87% increase from previous year)
- Arkansas (61% increase from previous year)
- Delaware (58% increase from previous year)
- Connecticut (37% increase from previous year)
Rate hikes as significant as those indicated by RealtyTrac are particularly concerning, considering the subject areas were the beneficiaries of early government support. Daren Blomquist, a spokesman for RealtyTrac, believes previous government initiatives are to blame for the recent rates. Others believe that foreclosures in judicial states may be to blame for the recent hike.
“Foreclosures are continuing to boil over in a select group of markets where state legislation and court rulings kept a lid on foreclosure activity during the worst of the housing crisis,” he said.
Bloomquist is quick to acknowledge that these states made an aggressive effort to contain the imminent foreclosure crisis. In doing so, the process was greatly lengthened to allow for officials to handle each individual situation appropriately. However, the lengthy process only served to postpone a lot of inevitable foreclosures. Banks were therefore accumulating more properties than they were capable of dealing with at the time.
Now, with the nation on the road to recovery, many of these banks are able to proceed with filing foreclosures. Houses that were foreclosed on in the past are just now experiencing the repercussions, hence the recent spike.
The United States experienced a six percent increase in foreclosure rates as a whole in July. As a result, the rate of foreclosures increased two percent from this time last year.
But the rate in which markets are experiencing similar increases appears to be slowing down. States like California, Illinois, Pennsylvania and Georgia are providing the rest of the nation with encouraging signs. It is in these states that foreclosure filings have returned to pre-bubble levels.
“The foreclosure boil-over markets are becoming fewer and farther between,” said Blomquist.