The foreclosure stat controversy

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We posted earlier today on the June foreclosure stats from RealtyTrac, which showed the level of ‘foreclosure filings’ in California dropped 2% from May to June, but is still running 286% ahead of last year’s levels.

Commenter ‘Mark’ points out, ‘realtytrac has a profit motive to overstate the number of foreclosures. they double and triple count the same loan at different points in the foreclosure process. their numbers are totally unreliable and alot of hype.’

Yes, RealtyTrac counts more than one foreclosure filing per house, but that doesn’t mean the numbers are unreliable. If they triple-count everything every month, the overall numbers will be three times as high, but the more important statistics -- the month-to-month trends that tell us whether the foreclosure problem is getting better or worse -- will be exactly the same as they would be if RealtyTrac counted only one ‘foreclosure event’ per house.

For that reason, we think the RealtyTrac numbers are valuable. We don’t make a big deal here about the raw numbers -- ‘how many houses are in foreclosure’; we focus on the trend, which held fairly steady in June, with foreclosures running more than triple year-ago levels.

Comments? Thoughts?
Photo Credit: Reuters