RealtyTrac data is convenient. Unfortunately, most major media outlets don’t know of (or use) better sources.
Palm Coast, FL – June 18, 2013 – For the Nth time in a row, the media has reported national, state and local foreclosure activity quoting statistics from RealtyTrac. Unfortunately, people with whom I speak tend to take these reports seriously. RealtyTrac is the media’s favorite and most convenient source for foreclosure data. I have one word for the veracity of their data; "bulls@#t." Here’s why.
In a June 12th article titled "Foreclosure filings climb in Flagler, inch lower in Volusia," the Daytona News-Journal writes, “In Flagler County, the number of mortgage loan default notices filed, foreclosure auctions scheduled or held and properties repossessed by banks rose in May to 290 — a ratio of 1 in every 166 homes, Irvine, Calif.-based RealtyTrac reported.” (Emphasis added.)
The N-J, again citing RealtyTrac, goes on to report, “In Flagler County, default notices rose to 90 last month, from 59 in April. Scheduled foreclosure auctions leaped to 149, from 44 the previous month, and bank repossessions climbed to 51, from 20 in April, according to RealtyTrac.” (Emphasis added.)
Realty v. RealtyTrac
According to Flagler County Clerk of Court records:
- There were 85 foreclosure filings in May, down from 100 in April.
- The number of May foreclosure auctions scheduled was 75, down from 81 scheduled for April. June’s foreclosure auction schedule listed 67 properties to be sold.
- 48 properties were titled to banks or third part bidders as a result of May foreclosure auctions, down from 60 in April.
There is no way these actual numbers could cause one to conger up the term “leaped.”
There are two problems with RealtyTrac’s methodology. First, their data sources apparently do not include the Clerk of Courts. Odd, because that is where all foreclosure activity is officially documented, including foreclosure filings, notices of foreclosure sale , auction schedules and title transfers (deeds, certificates of title, etc.). Bad data leads to bad reporting and flawed conclusions.
Second, RealtyTrac basically reports the “number of properties in some stage of foreclosure” as (number of foreclosure filings) + (number of foreclosure sales scheduled) + (foreclosure sales completed). That makes no sense. It’s illogical. It triple counts on one hand while ignoring on the other hand the vast number of properties in limbo within the process. It’s analogous to reporting “the number of people who are in some stage of dying” as (number of live births) + (number of terminal illness notifications) + (number of deaths).
Unfortunately, the media continues to sensationalize using data made out of whole cloth. First and foremost, RealtyTrac touts itself as “the leading online marketplace of foreclosure properties…” You shouldn’t put much credence in their analytical ability. Neither should the media.