Trend Shows that Foreclosure Numbers Will Increase in 2012

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The giant real estate database firm RealtyTrac releases foreclosure reports every month and on the basis of these reports, it has been found that throughout 2011 till November, the rate of foreclosure activities were lower in almost every month all over the nation compared to the previous year.

Owing to this decrease in the number of foreclosures throughout the year, there were less than 2,000,000 properties in the country which received foreclosure filings which initiate the foreclosure process. A year ago in 2010 there were about 2,900,000 properties which received foreclosure filings. So on a year-over-year basis, there is a 30% drop in the number of foreclosure filings in the nation.

Recently, the year ending report of 2011 has been published by this data firm. There are many states including Florida, Maryland and New Jersey which reported a 50% or more drop in the rate of foreclosure activities last year.

Moreover, the shadow inventory which is really the darkest part of the real estate market has also moved down significantly in 2011. RealtyTrac reported that in the last month of 2010, there were more than 2,200,000 properties in shadow inventory which declined down to fewer than 1,500,000 properties by September 2011. So, in these nine months, there was a 32% drop in the shadow inventory, which comprises a supply of twelve months of inventory.

Although there were plenty of apparent good news in the foreclosure market in 2011 but all these do not imply that the adverse impacts of the foreclosure crisis are over in the real estate market. After the highest foreclosures seen in 2010, 2011 recorded low foreclosure numbers because of delayed foreclosure processing.

But all these backlog foreclosure cases will come up to in 2012, resulting in another new foreclosure record. In 2012, the foreclosure numbers will increase significantly in comparison to 2011 but according to some experts, the number will not exceed the record figures of 2010.

Many investors, buyers and realtors will opt for the REO market and short sales this year and will handle a large number of foreclosure cases. On the basis of the records of 2010, RealtyTrac expected that nearly 1,200,000 properties would be foreclosed in 2011.

But in reality, due to slow foreclosure processing, there were only 800,000 properties which were foreclosed by the end of November 2011 throughout the nation. So there is a difference of 400,000 properties which are likely to be added to the foreclosure tally this year.

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