Foreclosures continue to rise

From Dr. Housing Bubble, on the rising tide of foreclosures:

There is a wonderful smell of delusion in the air. As the state marches on to economic Armageddon, there is now a large portion of bottom callers jumping into the market. Many investors are now buying up homes in the Inland Empire and other depressed areas for 50, 60, and sometimes 70 percent off peak prices. A mentor once told me, “at times, things are cheap for a reason.” At the low end, we may be seeing signs of a bottom. But one thing people forget is that this does not necessitate that prices will bounce up. Since we have emulated Japan in everything concerning fiscal and monetary policy, we may have a stagnant decade of real estate ahead of us. So for those buying homes for $100,000 and collecting $800 in rent, you are a long way from cash flowing like a mogul. Yet those making the argument that the mid to upper range won’t fall simply do not back up their arguments with any good data. I have for over a year explicitly shown how the Alt-A and Option ARM collapse will depress California housing for many more years and now this is being picked up by the mainstream media.

The ultimate sign of housing distress is a foreclosure. With recent data we now find that nearly 1.6 million homes have foreclosure filings for 2009 and this is with 5 months of data:
...
Now it is relatively easy to predict where this trend is heading because notice of defaults are still at record levels. California by itself made up 28 percent of all foreclosure filings in May and if we throw in Florida, Nevada, and Arizona we are approaching the 60 percent mark. The awesome foursome has record numbers of notice of defaults assuring us more foreclosures for months to come. Now why are notice of defaults so important to follow? It is an important leading indicator. When the market tanked in 2008 the notice of default market was telling us gear up in 2007. A notice of default is the first step in the foreclosure process. Many times these are filed when 3 missed payments are made. Now here in California, you can see how quickly this will spiral out of control. ... [emphasis added] ...

Read it all here. Unfortunately, the data point to lots more pain to come, with states like California, Nevada, Arizona, and Florida likely to be hardest hit.