Sacramento Foreclosures - Why the Numbers Need to be Taken with a Grain of Salt

The California Association of Realtors' Market Matter Advisory just hit my mailbox and I think this is important information in the light of all the bad news of foreclosures out there.

If you're reading numbers from Realty Trac, you should remember that the company reports defaults on loans and not properties - an important distinction that could artificially inflate foreclosure statistics since a first mortgage and a home equity line could count as two foreclosures, although they are both on one piece of property.

Another piece of information that I don't think most consumers are aware of is that a foreclosure filing includes default notices, auction sale notices and bank reposessions. One property can fall into each of these categories as it goes through the foreclosure process. RealtyTrac counts each of these as separate incidents and can skew the statistics.

Now be aware that I am not denying that there are a record number of foreclosures out there. In fact, that is how prices have fallen and many people that have not been able to buy in years are now first-time buyers. But I think it's important to remember to take the doom and gloom news with a grain of salt and remember that in the long term real estate is a great investment.