California and Florida combined have totaled nearly 1.5 million REOs over the last 10 years, according to ATTOM Data Solutions Year-End 2019 Foreclosure Market Report. Other states leading the nation in REOs include Michigan (333,312), Texas (323,806), Illinois (312,057) and Georgia (304,964).
Metropolitan statistical areas with a population greater than 200,000 that saw a year-over-year increase in REOs included Honolulu, Hawaii (up 34%); Myrtle Beach, South Carolina (up 28%); Florence, South Carolina (up 18%); Buffalo, New York (up 16%); and San Luis Obispo, California (up 9%).
On a broader level, however, REO activity has been dropping significantly across the U.S. The nation saw 493,066 foreclosure filings in 2019, representing 0.36% of all U.S. housing units, down from 0.47% in 2018.
ATTOM’s report includes default notices, scheduled auctions and bank repossessions as foreclosure filings, which were down 21% from 2018 and down 83% from a peak of nearly 2.9 million in 2010.
Repossessions dropped as well in 2019, down 37% from 2018 to 143,955 total properties.
“The continued decline in distressed properties is one of many signs pointing to a much-improved housing market compared to the bad old days of the Great Recession,” said Todd Teta, Chief Product Officer for ATTOM Data Solutions. “That said, there is some reason for concern about the potential for a change in the wrong direction, given that residential foreclosure starts increased in about a third of the nation’s metro housing markets in 2019. Nationally, the number also ticked up a bit in December. While that’s not a major worry, it’s something that should be watched closely in 2020.”
Foreclosure starts were down 9% year over year in 2019, to 335,985. States that saw the largest declines in foreclosure starts from last year included Nevada (down 30%); New York (down 28%); New Jersey (down 21%); California (down 13%; and Arizona (down 11%).
“With foreclosure inventory down and interest in that inventory up, it’s a good time for sellers with distressed inventory to sell while the sun shines,” said Daren Blomquist, VP of Market Economics with Auction.com. “Foreclosure buyers still enjoy sizable discounts below estimated market value due to the distressed nature of foreclosure inventory, but the average sales price for foreclosure auction properties sold through the Auction.com platform rose to a new record high in 2019 even as the rate of sales to third-party buyers increased.”