As housing markets around New Mexico slowly recover, a growing shadow market of foreclosure homes is looming, according to Irvine, Calif.-based RealtyTrac’s latest Foreclosure Inventory Update report.
The state had 9,144 homes somewhere in the foreclosure process as of the first quarter, a 69 percent increase from 5,411 as of the first quarter of 2012, according to RealtyTrac data. For comparison, the inventory of foreclosure homes nationwide rose by 9 percent over the same period.
The vast majority of those New Mexico homes – 7,084 – were tied up in state district courts, where foreclosure actions are handled through civil lawsuits filed by the lender against the homeowner. Of the remainder, 1,764 were repossessed or held by a bank while 296 were scheduled for a foreclosure sale.
New Mexico was one of 26 states posting an increase in foreclosure inventory from the first quarter of 2012 to the first quarter of 2013, RealtyTrac noted. Of those 26 states, 19 use a judicial foreclosure process like New Mexico. Foreclosures tend to linger in court, driving up the inventory of foreclosure homes in those states.
In New Mexico, two out of every five homeowners in default on their mortgages either clear out of the house in anticipation of a foreclosure or are investors who live elsewhere.
Of the homes in the foreclosure process during the first quarter, 41 percent were unoccupied in New Mexico, compared to a national average of 35 percent. Half of the 107 homes in Valencia County going through foreclosure were unoccupied, the highest percentage among counties in the metro.
In states like Indiana, Kentucky, Nevada, Oregon and Washington, 50 percent or more of foreclosure homes are unoccupied.
Some costs can follow homeowners in default who move out before the foreclosure is completed and the house is under new ownership, RealtyTrac says in its inventory update.
“The homeowner is still responsible for maintenance and property taxes,” it says.
RealtyTrac’s inventory update includes characteristics of homes going through foreclosure based on national data. For example, 71 percent of foreclosure homes are between 1,000 and 2,000 square feet in size. Most of the remainder, 21 percent, were between 2,000 and 3,000 square feet.
In a breakdown of foreclosure homes by the decade they were built, not surprisingly the decade of the 2000s – the decade of the housing bubble – provides the largest share of homes in the foreclosure process at 21 percent.