Almost 85 percent of large cities showed a decrease in foreclosure activity during the first six months of 2011 according to the Mid-year 2011 Metropolitan Foreclosure Market Report released on Thursday by RealtyTrac.  This includes the ten cities with the highest foreclosure rate among the 211 metropolitan markets covered by the report and all but one of the top 20.

RealtyTrac 's report usually incorporates documents filed in all three phases of foreclosure.  This midyear summary does not break out filings by filing type.

• Default - Notice of Default (NOD) and Lis Pendens (LIS); 
• Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS);
  
• Real Estate Owned (REO Properties) that have been foreclosed on and repurchased by a bank).
  

Thirty-three metropolitan areas showed year-over-year decreases in excess of 50 percent and ten had decreases of that magnitude since the previous six-month period.  The majority of the cities showing these large drops in foreclosure activity are located in Florida.  Only one Florida city, Cape Coral-Ft. Myers, remains in the top 20 for foreclosure activity (at number 12) compared to the first half of 2010 when Florida held nine of the top 20. 

While RealtyTrac is silent on any causative factors, one wonders if the dip in Florida indicates systemic problems such as delays for legal reasons rather than any improvement in the housing situation, especially given the persistently high level of unemployment in the state.

The sole city among the largest 20 where foreclosure activity was up was Seattle, which increased 10 percent to rank 57 among all 200 cities, up from 97 in the first half of last year.  Despite decreases of over 10 percent and 13 percent respectively, two other large cities moved up in the ranks of foreclosure activity.  Houston moved from a 109 rank to 91 and Minneapolis from 79 in the first half of 2010 to 64.

A 74 percent year-over-year decrease in foreclosure activity helped push Baltimore's foreclosure rate ranking from number 83 in the first half of 2010 to 182 in the first half of 2011 - the biggest drop in rankings among the nation's 20 largest metro areas. That was followed by Washington, DC, down from 67 in the first half of 2010 to 131 and Boston which moved from number 120 to number 158.

There were two metro areas that showed a huge spike in activity.  Des Moines, Iowa had an increase of 149 percent year over year taking it from number 163 on the list to number 55 while Fayetteville, NC went from number 201 to number 170 with a 182 percent increase.  A footnote to the Des Moines number indicates that the increase may be due in part to data collection changes but no explanation is offered for the Fayetteville numbers.

"Foreclosure activity continued to slow in the first half of 2011, especially in the most foreclosure-saturated markets and in markets where the judicial foreclosure process is used," said James J. Saccacio, chief executive officer of RealtyTrac. "The 20 metro areas with the biggest year-over-year decreases in foreclosure activity were all in states with judicial foreclosure processes - New York, Maryland, Florida, New Jersey, Connecticut, Massachusetts, and Illinois.

"These dramatic decreases indicate the foreclosure pipeline continues to be clogged in many local markets across the country, sometimes by a glut of already-foreclosed properties that are not selling quickly, sometimes by a mountain of improperly filed foreclosures that are blocking the inflow of new foreclosure filings - and sometimes by both."