Alaska continues to have one of the lowest levels of foreclosures and delinquent residential mortgage loans in the country according to the Mortgage Bankers Association 3rd quarter survey.
Alaska ranked 4th best in the nation behind North Dakota, South Dakota, and Montana as having the lowest percentage of mortgage loans delinquent, meaning more than 30 days past due, but not yet in foreclosure. Alaska’s rate of 4.95% was significantly better than the national average of 9.4%. The U.S. remained unchanged, while the delinquency rate in Alaska did increase 0.2% from 4.76% in the 2nd quarter of 2010. The highest rate for Alaska was the third quarter 2009 survey at 5.1% and the recent low was 2.7% in the third quarter of 2008. Nationally the delinquency rate was 6.2% in June of 2008 and increased to 10.4% by the end of 2009. It then showed an improvement of 1% in the first quarter of 2010 declining to its current level of 9.4% for the last three quarters.
Alaska ranked 2nd best of all 50 states in both total foreclosures in progress and those started in the 3rd quarter of 2010. Alaska’s total foreclosure rate of 1.1% compares to 4.4% nationally and both areas showed improvement in the third quarter. Alaska’s rate improved 0.3%. It had averaged 0.9% in 2008 and then began to rise in 2009 to a high of 1.4% at the 3rd quarter. It remained at that level in 2010 until this quarter’s improvement. Nationally the foreclosure rate was 2.8% in 2008 and continued to rise each quarter, reaching 4.6% by year end 2009. It has remained constant at this level in 2010 until the 0.2% improvement in the third quarter.
Subprime loans, to traditionally unqualified borrowers, were a major source of the mortgage problems that plagued the country recently. However, Alaska continues to have the lowest level of subprime loans delinquent or foreclosed in the nation. Alaska’s subprime delinquency rate is 12.3% while the national average is 26.6%. The second lowest state is Colorado at 19.2%, so Alaska is far ahead of the pack in this key category. It is important to note that Alaska is still 6% worse than its recent low of 6.3% in the 3rd quarter of 2008.
Foreclosures will weigh on prices in some areas. Others not so much. We are three years into tiegthr lending practices but I think we need to put 5 years between us and the end of the subprime era before we really get the majority of the bad loan defaults flushed through. In addition to those there will always be foreclosures related to the usual suspects, (divorce, bad economy, job loss, etc). I don't expect to see it decline until 2012 and even then much will depend upon the state of the economy. I am skeptical of seeing even the modest 3.8% appreciation next year. The purchase of bargain priced foreclosures by house flippers who then fix them up and sell them for a premium will help diminish the damage on price averages, but I am still skeptical of an increase. Really cheap bargain-basement homes or really super unusual or very exceptionally nice homes are the only two types selling right now. An average nice house with an average market price is just deadwood in the current market.
Posted by: Gum | Saturday, August 04, 2012 at 02:37 PM