Foreclosure Update 2023 - Here's the Scoop

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Foreclosure Update 2023...Here's The Data!

Alice Lema: [00:00:00] Well, Hey, real estate fans. Welcome back to another edition of the weekly podcast. So glad you could join us today. I'm Alice Lema. I'm a real estate broker and John L. Scott here in Southern Oregon. And we're today, we're going to talk about foreclosures because again, I had so many buyers and sellers, both talking to me about the impending correction that's coming and we just watch the data. That's what we do here. We just track the data today.

We're going to talk about foreclosures and we're actually going to take a trip back in time and look at what catastrophic amounts of foreclosures look like and put that in perspective and then compare it to what we're experiencing today.

So In 2009, early 2009, CNN published a report going back looking over what happened in 2008 and they considered a catastrophic percentage of foreclosures in Nevada, Florida, Arizona, California. Those were the areas that were hardest hit. And here's what the numbers look like in Florida and also [00:01:00] in Arizona.

4. 5 percent of homeowners were in active foreclosure. That was considered super high 4. 5%. I'm not discounting how terrible it is to go through an economic hardship like a foreclosure. I'm just saying, let's put it in perspective, 4. 5 percent of all homeowners in Arizona and Florida being in foreclosure was considered super, super high.

Okay. Nevada, 7% of homes were in foreclosure, 7 percent of the Nevada home owners were undergoing some kind of foreclosure filing. And then let's look at the, the most distressed area at the time was considered to be Stockton in California and they had the highest foreclosure rate of any metropolitan area in the United States. And they were at 9. 5%. So we're looking at 4. [00:02:00] 5 to 9. 5 percent as catastrophic amounts of foreclosures. That still means that 90 percent of the homeowners or more were okay.

Interesting numbers, huh? All right. And now let's look at what's going on in today's market. Now, this is a chart put out by Freddie Mac and Fannie Mae, and you can see two trajectories, but they are following similar data.

So they, they have very similar numbers, but on the left, you can see our percentages are 1. 2 percent at the top. All the way down to half a percent. And you can see from 2022 through where we are now in 2023, our foreclosure rate, our delinquencies, let's say and delinquencies are defined as somebody who's more than three months behind. And that's when it becomes a public record, which is how we can track things. But you can see, we have a ridiculously [00:03:00] low amount of foreclosure activity in the United States right now.

And it is, it's common to have a certain amount of those kinds of properties, short sales foreclosures. We should have some. And that's part of what our inventory problem is. We don't have enough houses on the market in part because our foreclosure and short sale activity is so low people just have a lot of equity in their house. We also have different lending standards now. So we just don't have the same situation.

Now, having said that, should we start to have a significant downturn? We're going to see that we watch these numbers every single week. We not only do this podcast every week, but I also do a special market update for our area. All three counties, Jackson County, Josephine, Klamath every week we track them.

And the last couple of weeks we're seeing some spikes in prices here and there. We're seeing inventory increases here and there. We're just waiting for all three counties to have a [00:04:00] really good report, weekly report all at the same time. That will be significant for our area. In the meantime, I wouldn't bet on the world falling apart right now, at least in the foreclosure department.

We've certainly seen in the last couple of years, the world can fall apart in other ways. But right now we think the housing market is going to be kind of okay, at least the residential. Now, we can also talk about commercial and this and that and the other thing, but those are different podcasts. I just wanted to take a minute this week and say, look at what catastrophic foreclosure rates were back during the housing crisis.

And at least in 2008, early 2009. We're looking at 10 percent or less of all homeowners being in crisis. So just keep those numbers in mind. Also keep in mind that we really don't have that many people losing their house right now. That doesn't mean that you might, [00:05:00] you might know somebody who has a personal economic situation, but we don't seem to be having a market situation, at least for right now.

But in the meantime, I would still like to talk to you about your real estate, whether you want to buy or sell invest. You've got maybe a group of Family members and you want to do something together, maybe a partnership. Give me a call. Give me a text 541-301-7980. We just started getting more homes on the market these last few weeks. Don't know what's special about the last few weeks, but we're definitely getting more choices in the marketplace and that's freeing up people to sell their house and pick a, pick a new house to move into. So we're looking to have kind of a busy fall and busy winter here in Southern Oregon.

So do give me a call and let's talk about what the next step is for your real estate life. In the meantime, have a beautiful rest of the weekend. Hug those you love by now.