If you follow the housing market, then you know that most of its most severe problems are concentrated in a few key states. They include Nevada, Florida, Arizona, California, and Michigan. In fact, the pain is focused even further into some specific cities in these states. Foreclosure data specialist RealtyTrac today released its tally of foreclosure activity for the third quarter by metropolitan statistical area (MSA). Cities in these five state dominated the top of the list.
In general RealtyTrac found foreclosure activity up in 65% of MSAs, but down in many of the hardest hit areas last quarter, compared to the same period in 2009. Because foreclosure activity is a broad category, it's helpful to break it out into types of activity, which include defaults, auctions, and bank repossessions. Because RealtyTrac's data is a little spotty on defaults, I'll just focus on auctions and bank repos here.
Let's start with the 20 highest concentrations of properties that received auction notices:
Again, it's clear which states dominate. Seven of these cities are in California, four in Florida, and three in Arizona. It's rather incredible that one in every 69 properties in the Phoenix-Mesa-Scottsdale MSA was listed for auction in the third quarter alone.
Here's the same chart for bank repossessions:
This time, eight of the cities are in California, three in Florida, and two in Arizona. It's also notable that Las Vegas was at or near the top of both lists. Even though the Phoenix-Mesa-Scottsdale MSA was only third on this list, its more than 14,000 home repossessions clearly must have kept banks there quite busy last quarter, as its number is the highest on the list.
Most of these cities have the common factor of having been capitals for housing growth during the boom. As a result, it's natural that they're centers for excessive foreclosure activity now that the bubble has popped. As foreclosures remains high in these cities, their economies will have trouble recovering -- especially since many were so reliant on housing as a major source of economic activity.