Home and condominium foreclosures in Metro Detroit continued to fall significantly in the first three months of this year, defying a forecast that they would rise and causing one analyst to say the foreclosure spike will not be as high as anticipated.
Default notices, sheriff’s auctions and lender repossessions declined 27.6 percent in Macomb, Oakland and Wayne counties during the first quarter compared with the same period a year ago, according to a Thursday report by RealtyTrac, an Irvine, Calif.-based foreclosure tracking company.
In March, the trend accelerated in the Detroit region, where foreclosures dropped 38.3 percent, according to RealtyTrac, compared with a nationwide decrease of 17.1 percent.
Macomb County experienced the most dramatic decline in the region at 49.3 percent last month compared with March 2011. The decline statewide was nearly 37 percent.
In 2011, foreclosure filings fell 31 percent in Metro Detroit. But RealtyTrac predicted a resurgence in foreclosure filings for at least the first half of this year because of a nationwide settlement of robo-signing practices that appeared likely to unleash a backlog of foreclosed properties on the market.
That backlog appears to have been over-estimated “because of the quicker non-judicial foreclosures in the state,” RealtyTrac analyst Daren Blomquist said in an email.
A rise in foreclosures is still expected, though, Blomquist said.
“There will likely be some jumps… in the next few quarters, but I am not seeing evidence that we’ll see the 20-40 percent spikes we are seeing in some other markets,” Blomquist said.
Foreclosure filings may not have risen as expected because banks and other lenders have concerns about flooding the market again with distressed property, said Alex Villacorta, director of research and analytics at Clear Capital, a California-based housing consulting firm.
“There is real disincentive to shock the market again,” Villacorta said. “And so there are some test programs by banks to turn some of those properties into rentals, as one option.”
Clear Capital notes Metro Detroit already has the highest lender-repossession saturation rate — the percentage of bank-owned homes sold compared with all properties sold — of any major U.S. market. The March rate was 51 percent, Villacorta said.
By Louis Aguilar, The Detroit News