Getting worse before it gets better

In October there was a significant increase (15%) in foreclosure filings, a category that covers default notices, scheduled auctions and bank repossessions.

Based on these statistics, RealtyTrac reported October was the largest month-over-month increase since foreclosures peaked in March 2010. Reportedly, one in every 1,069 homes received a foreclosure filing in October. Foreclosed properties to be auctioned increased 24% month over month and rose 7% year over year in October.

Foreclosure auctions scheduled increased from last year in more than half of the states across the country. In Oregon they increased by almost 400% and in North Carolina by almost 300%. In our region, foreclosures increased during this time frame as follows: New Jersey 118%, New York 89% and Connecticut 60%, according to RealtyTrac.

Over the past several years, scheduled foreclosure auctions increased an average of 8% in the month of October, the reason being that banks try to execute foreclosures before the holiday moratorium on foreclosures. The number of foreclosures in October of this year was more significant than normal, because distressed properties that have been in process for years are being cleared for sale by the banks.

There remains demand by institutional investors for foreclosed properties, and banks are selling repossessed properties fairly quickly for a good price with rising home prices. According to the National Association of Realtors (NAR), distressed properties sold 14% below market value. Properties in good condition were discounted by 10% to 12%, while properties in poor shape were discounted from 14% to 20%, according to the NAR.

Housing analysts are optimistic about the real estate market as a residual of the financial crisis is going away with the sale of distressed properties. According to NAR, banks repossessed 26% fewer homes in October as last year. Approximately 56,452 homes started the foreclosure process in October, representing a 12% increase from September but a decrease of 4% when compared to last year.

Realtors can be at risk

Realtors are taking more precautions in meeting new clients and showing properties, because of safety concerns. Realtors are being advised to first meet a new client at their real estate office before showing. This benefits prospective clients as well because they can take the necessary steps to review properties of interest, understand what is available to them in a professional setting and learn the price range for a home they can comfortably afford.

Sellers are advised to remove items of value about their home when listing. There are other steps Realtors are taking in conducting public open houses. Prospective buyers and sellers will both benefit from these new protocols. Understanding and respecting these changes by prospective buyers and sellers can also be of help.

Realtors need to consider what personal information they provide when promoting themselves, especially on social media. More exposure can be a double-edged sword, as many warn. There are risks to everything, but a few simple preventative steps can minimize those risks.

Mary Ann Clark is a Realtor with Coldwell Banker at 189-191 Mason Street in Greenwich. Questions or comments may be emailed to [email protected]

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