Here’s the good news: Foreclosures are declining in North Texas. Steve Brown (sub. required) reports today that lenders foreclosed on more than 7,800 D-FW homes during the first half of 2011, using figures from the folks in the know, Addison-based Foreclosure Listing Service. Looking over the past three years of hell we have experienced, that’s more than a 10 percent drop in foreclosures from the first half of 2010 and even better, a 25 percent drop from the same period in 2008, says Steve: And here are the words that make my day:

 “It was the lowest total for the first six months in more than four years.”

Then D’Ann Petersen, a business economist over at the Federal Reserve Bank of Dallas, said “The housing market is still wobbly, but it does appear to have reached a bottom.”

Those of us who live “in the bubble” always wonder where are these foreclosures concentrated? The answer is the far-out suburban areas. Foreclosure rates are highest in  Collin County suburb cities like Celina, Anna, Princeton, Lavon and Little Elm in Denton County. Rates are also higher in the south side suburbs of Lancaster, Glenn Heights and Forest Hill southeast of Fort Worth, plus Blue Mound and, ironically, Fate in Rockwall County.

I recall writing a story about how great life was in Fate not that long ago. But a recent story in The Huffington Post reports that suburbs are catching up to the major cities when it comes to poverty. Though cities still have nearly double the rate of poverty as suburban areas, the number of people living in poverty in the suburbs of major metropolitan areas increased by 53 percent between 2000 and 2010, as compared to an increase of 23 percent among city-dwellers, according to a Brookings Institution analysis of recently released census data. In 16 metropolitan areas, including Atlanta, Dallas and Milwaukee, the suburban poor has more than doubled over the last decade.

Steve Brown reports that, in the first part of 2011, the loans that ended up in foreclosure averaged 6 years old on homes valued at about $122,581. The average tax assessment value was $141,199 for the properties sold at foreclosure auction. The houses were about 1900 square feet in size. All this jives with what I said last show on KXAS-Nonstop Nightly: most of the homes in foreclosure are at $200,000 and under.

Could the worst be behind us? We know some lenders have delayed home foreclosures this year, so it may not be Miller Time just yet. Some experts predict that foreclosure volumes could rise later this year and into 2012.

But the guru of real estate in Texas, that being my hero Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University, does think the worst may be behind us. Still, Jim Saccacio, president of the nationwide foreclosure tracking firm RealtyTrac, doesn’t think Texans are out of the woods YET. Thank God we live in Texas. Experts here think the impact of foreclosures here will be far less severe than elsewhere. In affluent neighborhoods, home sales and prices are stabilizing and I know of at least one home that appraised for more than asking price! At least three homes written about on this blog are under contract or have sold. The only truly slow go area I know of in Dallas is the Turtle Creek condos. I’m chasing a rumor that a man from China bought an entire floor at the new Museum Tower.

Update: I want to note that nationally, foreclosure rates are up, like really up. “This is really the first time we’ve seen a significant increase in the number of new foreclosure actions,” said Rick Sharga, a senior vice president at RealtyTrac, who tracks FC rates. “It’s still possible this is a blip, but I think it’s much more likely we’re seeing the beginning of a trend here.”

Roddy’s Foreclosure list is out and it looks like good news for North Texas: Dallas-Fort Worth area foreclosure postings for the October auction dropped 17 percent year-over-year to 4,177 homes, according to data compiled by Addison-based Foreclosure Listing Service Inc   Compared with last month, the Oct. 4 auction will have 13 percent fewer foreclosure postings, according to George Roddy, Sr..

It’s still not Miller Time.

“Without a doubt, this is good news,” said George Roddy Sr., president of Foreclosure Listing Service. “But, I am still very guarded about the foreclosure market. And, due to my concerns, I am not celebrating a turnaround yet.”

Dallas County’s foreclosure listings dropped 17 percent to 1,741 homes. Collin County’s foreclosure listings fell 22 percent to 570 homes. Denton County and Tarrant County’s foreclosure rate decreased 20 percent, and 14 percent, respectively. And even though postings are coming down, consider this: in 2000 only 1049 Dallas area homes were posted for foreclosure; activity is now 300% higher.

So Roddy has several reasons for being cautious: there are an estimated 700,000 U.S. homes in repo that remain in what we call “shadow inventory” —  that is, will likely be put up for foreclosure. Ever since the Robo-signing fiasco (banks expediting foreclosures not quite legally) banks are slowing down the process, dotting i’s and crossing t’s, which means they will just be foreclosing more, longer. Those pups have not even hit the market.

“At September’s foreclosure auctions in the D/FW Metro, almost 120 properties were bid on and successfully purchased by third-party buyers at the auctions, ” says Roddy. “Those buying postings based on mortgage delinquencies paid on the high-side $0.77 (77 cents) per dollar down to as low as $0.19 (19 cents) on the dollar based on the assessed value of the property.”

Like someone who snagged a $102,000 home for $19,000.

If lenders were to avalanche the market with all these foreclosures, it would drag down the regular market, negatively impacting home values.

And that could happen, if Washington pressures the banks to write down all the bad loans. As you will hear from me over and over again ad nauseam: bank profits are up by 135% while their lending is down by at least 9%.

Purging the system of those bad loans would be painful immediately (to the banks!), but bring about a closure of sorts to the market.

May be a little crude, but it’s kind of like this: do you want to take the laxative now or be miserable for three years?

A few quick facts from Foreclosure Listing Service that should help us catch our breath as we listen to the barrage of depressing national stats coming down the pike. But here in Dallas:

  • “The average Joe is still the one feeling the pains of this foreclosure crisis.”
  • “83% of the homes posted for foreclosure so far this year were valued at under $200,000.”
  • “Homes valued below $100,000 were the only ones to experience an increase in Year-to-Date posting activity with a 7% increase
  • “Among the other five home price categories, posting activity declined compared to one year earlier.”
  • “The largest share of residential posting activity in the Metro so far this year was claimed by homes valued in the $100,000 to $199,999 price range (based on assessed value).  With 23,219 postings filed, around 50% of all the homes posted for foreclosure so far this year fall within the $100,000 to $199,999 price range.”
  • “The second highest share of home postings was 33% found among homes priced below $100,000.”
  • “Just 17% of the homes posted for foreclosure so far this year have a value of $200,000 or more.”
  • “Executive homes, those priced between $300,000 and $499,999, only claimed 2% of the total posting activity with 720 postings.”
  • “Only 227 postings were filed on D/FW luxury homes, which include those priced at $500,000 or more”

For the first time in more than THREE YEARS, foreclosures are diminishing in Dallas Fort Worth. George Roddy Sr. of Foreclosure Listing Service, Inc. reports some good news preceding the spring market: Dallas Fort Worth residential foreclosure postings have dropped to a 40-month low. Roddy says that for the upcoming auctions on May 3, only 3,719 postings have been filed on delinquent homes, which is the lowest number since January of 2008 when 3,672 postings were filed.

2008 — wow — remember those days? And remember last April when 6,168 foreclosure postings were reported?

Have we come a long ways baby at last? No, says Roddy. Don’t get too excited about a one month drop. In other words, it ain’t Miller Time yet. During the previous 31 consecutive months, the volume of D/FW home foreclosure postings has exceeded 4,000 each month.¬† Roddy thinks the decline may be artificial:

“I believe this is an artificial decline in foreclosure notices due to the tremendous scrutiny applied by regulators during recent months in response to publicity about past problems with the foreclosure process, including robo-signing.”

The 40 year veteran foreclosure researcher says¬† this month‚Äôs drop in postings is certainly welcome news. But he doesn’t believe we are out of the storm yet.

“The fallout from this foreclosure crisis is going to take a long time to work through, says Roddy.”

In fact, some analysts are predicting lenders will actually increase the number of foreclosures in the months ahead as they get their processes down. Foreclosure attorneys are in Washington right now lobbying. This is positive: the biggest drop in current foreclosure filings took place in Collin County, which had really taken a beating according to my sources up there. Postings dropped 31 percent from a year ago. Postings are down 23 percent in Dallas County and down 24 percent in Tarrant County.

e also cautions against claiming that job gains in Texas over the last years was the catalyst: there has simply not been enough growth yet, nor has it been for a significantly sustained period of time, he says.

It’s kind of like taking the cast off too soon. So what does this mean to home buyers and sellers? More of the same. In other words, get rid of the notion that your home is some sort of moneybox that will make you rich. I do think many Americans are finally get realistic about real estate. Don’t let anyone pawn off stupid loans on you, and look at real estate as a long-term investment. Today we are hearing grumblings of inflation, and the rich are snapping up homes like crazy.

“Even re-employment in today’s market does not assure that a family’s bills will be paid because many workers are being hired at wages far lower than at their previous job,” says Roddy.

And keep in mind what our legislature and Congress is up to: raising taxes to cover the deficit. I am still bullish on real estate and would say buy now rather than later, but only if you can really afford to!

D/FW Residential Foreclosure Postings – MAY

AREA

OR COUNTY

#

TOTAL RESI

POSTINGS

MAY

2010

#

TOTAL RESI

POSTINGS

MAY

2011

%

CHANGE

FROM

MAY

2010

%

CHANGE

FROM

PREVIOUS

MONTH

%

CHANGE

FROM

MAY

2009

%

CHANGE

FROM

MAY

2008

%

CHANGE

FROM

MAY

2000

D/FW METRO 4,861 3,719 -23 % -28 % -33 % -16 % 265 %
DALLAS COUNTY 2,021 1,558 -23 % -27 % -35 % -25 % 178 %
TARRANT COUNTY 1,612 1,219 -24 % -32 % -34 % -12 % 263 %
COLLIN COUNTY 668 462 -31 % -28 % -37 % -9 % 611 %
DENTON COUNTY 560 480 -14 % -23 % -19 % 5 % 714 %

Please Note:

  • The statistics listed above are for residential foreclosure postings, which include postings of single-family homes, condominiums, & townhomes.
  • N/A = Not Available
  • N/C = No Change
  • ‚ÄúPercent Change‚Äù is rounded to the nearest whole number.
  • D/FW Metro is the Dallas/Fort Worth Metro, which equals the sum of Dallas, Tarrant, Collin, & Denton Counties.