animelover
General Manager
Mar 12, 2021 by Aly J. Yale
Despite all the foreclosure protections and other COVID-19-related relief measures for homeowners, it appears foreclosures are actually on the rise in recent weeks. According to a new report from ATTOM Data Solutions, foreclosures jumped 16% between January and February, and in 29 states, they're trending upward.
If you're a home flipper or rental property investor, it might seem like a glimmer of hope -- especially if distressed properties are your typical go-to purchase. But is it actually reason for optimism just yet? Let's dive in.
What the data says
Foreclosures are definitely up. In February, one in every 12,182 properties went into foreclosure, up 16% over January. Additionally, foreclosure completions were up 8%.
Foreclosure starts also increased in more than half of U.S. states, with the highest foreclosure rates in Utah, Delaware, Florida, Illinois, and Louisiana. (Utah saw one in every 3,883 housing units foreclose last month.)
The news is likely surprising, what with foreclosure moratoriums, mortgage forbearance, and other pandemic relief efforts still in place. But according to Rick Sharga -- executive vice president of RealtyTrac -- not all properties are subject to these measures.
"The government's moratorium bans foreclosures on government-backed loans for homeowners, and borrowers in the forbearance program are also protected from foreclosure actions," Sharga said. "But loans on commercial properties, investment properties, and properties that are vacant and abandoned do not always have the same protections. This could be why we're seeing a slight increase in foreclosure starts despite the government programs."
Reasons for caution
If you typically look to distressed properties to expand your investment portfolio, the upward trend likely gives you hope. But don't get too excited just yet.
The increases noted by ATTOM are just monthly ones, and when you look at the data over the year, foreclosures are still down significantly from their pre-pandemic days.
Between February 2019 and February 2020, foreclosures have dropped 77%, and foreclosure completions fell 85%.
What that means is that while foreclosures may be trending upward, it doesn't necessarily indicate that distressed properties will be widely available anytime soon. Until moratoriums and other COVID-19 protections expire, the supply of these properties will likely remain low.
To top things off, the few properties that do hit the market will see high demand. According to recent data from Auction.com, foreclosures are currently selling at their highest price-to-market-value ratio since January 2014, and bids per property? They're at an all-time high.
What you can do
If you are seeking out these properties, your best bet is an online bidding app, which allows you to bid on properties across the country no matter where you're located. You should also opt for cash offers when you can, or, if that's not possible, have a preapproval in hand before submitting your bid. You can also try these five alternative options for investing.
Unfair Advantages: How Real Estate Became a Billionaire Factory
You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why.
But those barriers have come crashing down - and now it’s possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you.
To get started, we’ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Simply click here to learn more and access your complimentary copy.
Foreclosures Jump 16% in February. Will More Distressed Properties Hit the Market?
Despite all the foreclosure protections and other COVID-19-related relief measures for homeowners, it appears foreclosures are actually on the rise in recent weeks. According to a new report from ATTOM Data Solutions, foreclosures jumped 16% between January and February, and in 29 states, they're trending upward.
If you're a home flipper or rental property investor, it might seem like a glimmer of hope -- especially if distressed properties are your typical go-to purchase. But is it actually reason for optimism just yet? Let's dive in.
What the data says
Foreclosures are definitely up. In February, one in every 12,182 properties went into foreclosure, up 16% over January. Additionally, foreclosure completions were up 8%.
Foreclosure starts also increased in more than half of U.S. states, with the highest foreclosure rates in Utah, Delaware, Florida, Illinois, and Louisiana. (Utah saw one in every 3,883 housing units foreclose last month.)
The news is likely surprising, what with foreclosure moratoriums, mortgage forbearance, and other pandemic relief efforts still in place. But according to Rick Sharga -- executive vice president of RealtyTrac -- not all properties are subject to these measures.
"The government's moratorium bans foreclosures on government-backed loans for homeowners, and borrowers in the forbearance program are also protected from foreclosure actions," Sharga said. "But loans on commercial properties, investment properties, and properties that are vacant and abandoned do not always have the same protections. This could be why we're seeing a slight increase in foreclosure starts despite the government programs."
Reasons for caution
If you typically look to distressed properties to expand your investment portfolio, the upward trend likely gives you hope. But don't get too excited just yet.
The increases noted by ATTOM are just monthly ones, and when you look at the data over the year, foreclosures are still down significantly from their pre-pandemic days.
Between February 2019 and February 2020, foreclosures have dropped 77%, and foreclosure completions fell 85%.
What that means is that while foreclosures may be trending upward, it doesn't necessarily indicate that distressed properties will be widely available anytime soon. Until moratoriums and other COVID-19 protections expire, the supply of these properties will likely remain low.
To top things off, the few properties that do hit the market will see high demand. According to recent data from Auction.com, foreclosures are currently selling at their highest price-to-market-value ratio since January 2014, and bids per property? They're at an all-time high.
What you can do
If you are seeking out these properties, your best bet is an online bidding app, which allows you to bid on properties across the country no matter where you're located. You should also opt for cash offers when you can, or, if that's not possible, have a preapproval in hand before submitting your bid. You can also try these five alternative options for investing.
Unfair Advantages: How Real Estate Became a Billionaire Factory
You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why.
But those barriers have come crashing down - and now it’s possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you.
To get started, we’ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Simply click here to learn more and access your complimentary copy.
Foreclosures Jump 16% in February. Will More Distressed Properties Hit the Market?