July 11, 2013, 12:07 p.m. EDT
Where home prices haven’t hit bottom
Bargains remain where foreclosures must pass through the courts
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As the property market recovers, some house hunters worry
they’ve missed their chance to snag the lowest price. But a spike in
foreclosures in some states means there are still deals on the horizon, experts
say.
Nationwide, the number of foreclosures is declining, according to data
released Thursday by real-estate data firm RealtyTrac. But in states where
foreclosed homes must snake their way through a lengthy court system,
foreclosures are actually rising. There were 801,359 U.S. properties with
foreclosure filings — default notices, scheduled auctions and bank repossessions
— in the first half of 2013, RealtyTrac found. But while the number of overall
foreclosures fell by 35% in June from a year ago – to the lowest level since
December 2006 – the number of so-called judicial foreclosures surged 34%. 
Judicial foreclosure auctions were scheduled for 28,296 U.S. properties in June, according to RealtyTrac. In many of those states, there was a glut of foreclosures. Foreclosures in New Jersey rose 103%, Florida surged 100%, Maryland 94%, New York 66% and Illinois 65%. What’s more, many of these properties are likely to come to market in the next six to 12 months, says Daren Blomquist, vice president at RealtyTrac. “If you missed the bottom of the housing market, this might be the last chance to get a bargain on one of these foreclosure homes,” he says.
Although foreclosures are no longer as big a problem nationally, they continue to be a thorn in the side of several state and local markets, Blomquist says, “particularly where a backlog of delayed distress has built up, thanks to a lengthy foreclosure process.” Given the rising home prices countrywide, Blomquist says it’s an good time for lenders to dispose of these distressed properties, either at the foreclosure auction, or by repossessing the property at the auction and subsequently selling on the open market as a bank-owned home.
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As the film ‘The Bling Ring’ demonstrates, finding the home addresses of celebrities is easy, despite the efforts of real-estate agents to keep property deals hush-hush.The biggest bargains though may not always be in the most desirable neighborhoods. “It’s hard to find a bargain price these days because there’s been such a recovery,” says Bradley Hunter, chief economist of Metro Study, a housing market research and advisory firm based in Houston. Many developments built in the latter years of the property boom were further from schools and urban centers. “If you’re willing to make a bit of a commute, you may be able to save more money,” he says. “In 2005, the motto for those looking for a new home was ‘drive til you qualify.’”
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There’s still more opportunity to get lucky in judicial states, experts say. The number of foreclosures in non-judicial states fell by almost two-thirds from 72,863 in January 2010 to 24,933 in May 2013; foreclosures in judicial states was 37,522 in January 2010, but were still hovering at 30,297 in May 2013, according to Herb Blecher, senior vice-president for Lender Processing Services in Jacksonville, Fla., a company that tracks mortgage performance. “Foreclosure inventories in judicial states are two to three times the size of those in non-judicial states,” he says.
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