Economy Watch: Lenders Getting Back in the Foreclosure Groove?
The pace of foreclosure filings rose modestly in January; the industrial sector is getting its legs; and Ron Paul spouts off about Bernanke and the Fed.
By Dees Stribling, Contributing Editor
The pace of foreclosure filings–default notices, scheduled auctions and bank repossessions–rose modestly in January, according to foreclosure specialist RealtyTrac, increasing 1 percent compared with December. Still, robo-signing and other embarrassments seem to have slowed the pace of foreclosure filings down somewhat, since the roughly 261,300 U.S. residential property foreclosure filings in January 2011 represents a 17 percent drop from January 2010.
Even the Las Vegas-Paradise, Nev. metro area saw a less than 1 percent month-over-month foreclosure filing increase and a 13 percent year-over-year drop. Still, the area maintained its dubious distinction of having the nation’s highest foreclosure rate among metros with a population of 200,000 or more, according to RealtyTrac. Seven California MSAs were on the top 10 foreclosure list (but not San Francisco, Los Angeles or San Diego). California, whose economy would be number seven or eight in the world, depending on who’s counting, also has a nation-sized housing problem: More than one-quarter of all U.S. foreclosure activity in January 2011 was in the Golden State.
“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” says RealtyTrac CEO James J. Saccacio in a statement. “Unfortunately this is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”
Industrial RE market looking up
Colliers International reported on Thursday that the U.S. industrial property market seems to be on the road to recovery. The company’s Q4 2010 North America Industrial Highlights report notes that the industrial market has registered an increase in occupied space for each of the past three quarters, including 23.7 million square feet of net absorption for all of 2010. In 2009, there was negative absorption of 160.7 million square feet nationwide.
Yet it isn’t quite a broad-based recovery. According to the report, a relatively small number of industrial property markets accounted for most of those gains: Charleston, Cincinnati, Dallas-Ft. Worth, the Inland Empire, Little Rock, New Jersey, Philadelphia, Phoenix and Savannah, to be specific. These markets absorbed fully 70 percent of the U.S. total.
Still, Colliers International is predicting a solid 2011 for the industrial market. Demand for space, spurred by growth in manufacturing and consumer spending, will continue to increase, the report posits. If U.S. GDP improves by 3 percent this year, as some economists prognosticate, the industrial market could generate as much as 200 million square feet of positive absorption for the year. At the same time, little new industrial product is in the pipeline, which might mean upward pressure on rents.
Paul takes aim at Fed
As chairman of the Federal Reserve, making a lot of carefully worded speeches seems to be in Ben Bernanke’s job description. Congressmen, on the other hand, are free to be a little less scripted. This week at the first U.S. House Financial Services Subcommittee on Domestic Monetary Policy and Technology hearings since Rep. Ron Paul (R-TX) became chairman of that particular entity, Paul called Chairman Bernanke “cocky,” referring to the Fed’s plans to dispose of some of the diverse assets it acquired during the Panic of 2008. Bernanke may be the first Fed chairman ever to be called that since Marriner Stoddard Eccles sketched out plans for the World Bank and the IMF on the back of an envelope at Bretton Woods.
But Rep. Paul had bigger things in mind that taking the current chairman to task. Itching to roll back about 80 years of monetary policy, he said, “the Keynesians believe it’s because the consumers don’t have money or they quit spending money, and if you just give money out, it’ll revive everything. But it doesn’t work.” He was also reportedly signing copies of his book “End the Fed” after the hearings, for true believers who wanted his autograph.
Wall Street hadn’t moved much one way or the other by the end of the day on Thursday, with the Dow Jones Industrial Average registering a hiccough of a loss, down 10.6 points, or 0.09 percent. The S&P 500 and the Nasdaq had their own hiccoughs, but they were positive: 0.07 percent and 0.05 percent gains, respectively.