It is evident that ForeclosureResearch is not the only one with concerns over certain foreclosure reporting companies The Housing Assistance Council, a Washington DC non-profit, has also expressed concerns over foreclosure data in certain areas of the country. Such concerns were recently released in an October 2009 HAC report, “What is the housing foreclosure situation in rural America?”

The report specifically describes concerns over RealtyTrac figures. Here is a snippet of the report:

RealtyTrac presents data for approximately 2,200 counties across the United States. This excludes roughly 900 counties, most of which are predominately rural. RealtyTrac does not openly disclose its methodology for data collection; however, company representatives indicated that they generally do not collect data for a county if it has less than 10,000 housing units (RealtyTrac 2008a). The company has reportedly improved its quality control measures; however, duplicate and multiple counting of foreclosure entries is a particular concern when citing RealtyTrac data (Galvin 2007). Limitations related to over representation in some areas (namely urban), and under-representation in others (primarily rural), indicate substantial concern when trying to derive rural foreclosure estimates from RealtyTrac data.

Report References:
Realty Trac -a. Telephone discussion with ReatlyTrac representative, Mike Smith. July 25, 2008.

Galvin, Andrew. “Tracking the Truth on Foreclosures,” The Orange County Register. November 18, 2007.

It has been a little over a year since the state of Colorado took foreclosure reporting into its own hands. Last month the state released its first yearly foreclosure report based on the numbers of its own collection methods. Colorado was the first state to break away from a reliance on the many times inaccurate reporting of RealtyTrac.

The only snag seemed to be reports comparing August and September 2009 rates with the prior year. According to the foreclosure data report, “the large difference in foreclosure filing totals between September 2008 and September 2009 is driven partially by statutory changes and partially by actual conditions in the real estate markets.”

Besides that minor hiccup, figures in 2009 seem to have stabilized dramatically since previous years under the indiscretions of RealtyTrac. According to an article in the Denver Business Journal published on October 8, 2009, “state officials have complained about widely followed foreclosure reports by RealtyTrac.” Continuing by stating their “methodology could lead to the counting of the same property multiple times.”

For a comparison, RealtyTrac reported 6,472 foreclosure filings in Colorado for August 2009. The Colorado Division of Housing reported 3,496. These figures further confirm RealtyTrac’s tendency to over-report.

While the division of housing only tracks metropolitan counties, it would be a stretch to say that rural Colorado areas showed about the same number of filings as total metropolitan filings. According to the U.S. Census Bureau, The population in the area covered by the state is over 4 million, while the population in areas not covered is less than one million. Along the same vein, in order to have a conclusive, state-wide figure RealtyTrac themselves would have had to cover the rural counties. However, the company has stated in previous inquiries they do not sufficiently report areas of populations less than 25,000.

Of the remaining counties not covered by the Division of Housing, 82% have populations of less than 25,000.

It looks like the foreclosure giant RealtyTrac has laid off a considerable number of employees within the last month. According to Inman News “RealtyTrac has trimmed its workforce by nearly 30 employees and is moving away from some media partnerships.” The layoffs comprise roughly a quarter of its current workforce.

According to Hitwise, an online metrics company, the company has exhibited a steady decrease in traffic over the last few months. The company also moved down in the rankings to 18 from 10 for overall online real estate popularity.

In the article Senior Vice President Rick Sharga explains, “We’ve been in some media deals that weren’t profitable.” He continues, “They were delivering traffic, but not profitable traffic.”

Considering these “media deals” it is no wonder why the media relied heavily on their figures in many of their articles. Certainly being a deep-pocket sponsor for the media outlet had some pull with reporting content as well.

Now that these media deals have proven unsuccessful, perhaps the media will become more diversified in the figures it reports. Or better yet, RealtyTrac will now focus more on accurate data collection methods- the basics of a foreclosure listing company, rather than over-leveraging the brand.