Monday, August 01, 2011

July recording statistics

While the recording statistics for July were mixed, the trends were negative when compared to the same month last year. First the good news: The number of deeds recorded was up 8%, the first increase in deeds since January. While many of these were related-party transfers and others were the same of bank-owned, previously foreclosed properties, there still were many arms-length sales which is certainly a good sign. The other positive number was foreclosure deeds: they were down 34%. The problem with this statistic is that the foreclosure deed comes at the end of the foreclosure transaction (unlike the order of notice which comes at the beginning). So following a period of low orders of notice, it would be predictable that months later, foreclosure deeds would also be low.

The bad news for July is in two parts: The number of mortgage dropped 21% compared to July 2010. This is an incredible drop-off and, with the number of deeds recorded up, suggests that home refinancings have dropped off substantially. Because refinancings in a time of stable interest rates are typically been used to pay for home renovations, additions or other consumer items, this decline in mortgages could signal a coming slowdown in the economy. The other negative indicator in July was an increase in the number of orders of notice; these rose 11%. This increase signals a resurgence in foreclosures during the coming months which inevitably will keep prices suppressed and stall the chances of a recovery of the real estate market.

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