We've noted before that the number of new foreclosures and short sales coming on the market for sale slowed in recent months. A major reason for this slowdown was likely the temporary foreclosure moratoriums that some major financial institutions instituted, as opposed to some sort of wholesale improvement in the financial situations of Twin Cities homeowners.
Now that many of those moratoriums have expired we've been waiting for some signs of whether or not foreclosures will resume their robust pace. It looks like we've got it now, unfortunately.
The Minnesota Home Ownership Center (MNHOC) keeps tabs on some very valuable pre-foreclosure data in the Twin Cities. When notice of pre-foreclosure is posted, MNHOC tracks it. They posted a blog recently highlighting a nasty trend in the data from recent months. Take a look:
2,814 pre-foreclosure notices in January up to 4,368 in May.
And we can't blame this on typical seasonal changes as foreclosure cycles are fairly unaffected by the shifts between winter and spring.
Considering the significant job losses we've seen in the last 12 months, stagnant wages and the still-not-yet-totally-finished-resetting ARMs this isn't necessarily surprising. But it certainly isn't welcome news. Expect foreclosures and short sales to be a significant part of the Twin Cities housing market for the next 18-24 months, and likely longer.
Hat-tip to Aaron Dickinson.