Hitwise recently released its top 20 real estate Web sites report for January showing some interesting new players in the game. Hitwise, an Esperian company, who provides online intelligence and tracking services to websites, issues monthly reports on traffic and visitor information on top industry sites.

The latest report shows some of the usual fluctuations within the major players in the online real estate arena, with one company standing out – RealtyStore.com. According to the report, RealtyStore.com moved up in the rankings from 49 in October, to 35 in December and up another 15 ranks to breech the top 20 real estate Web sites.

This comes as a surprise considering RealtyStore has been a relatively obscure foreclosure listing company running in the shadows of behemoths such as RealtyTrac and Foreclosure.com – both of whom do not even rank on the Hitwise top 20.

The new rankings prompted me to check out the latest traffic data to see if my own findings confirmed those of Hitwise’s. If all reports match-up, there should be a significant spike in traffic during the period between October 2009 and January 2010 to support the jump in rankings.

According to Compete, a leading web analytics company, RealtyStore.com did not show a significant increase between October and December, in fact it exhibited a rather flat progression. It did however; show a rather unnatural spike in traffic during the month of January. This begs the question: is the company naturally growing in popularity or are they simply spending and arm and a leg on in advertising?

In a separate area of interest is the company itself. How does the company operate? What is their reputation like? In a quick reference to Ripoff Report, there were a few complaints right off the bat. The most recent complaint coming from Matt, posted on February 11, 2010, states, “I signed up for RealtyStore.com. They advertise things like find a foreclosure house for under $10,000. First off I did not see one house legitimately offered for under $10,000.” He continues, “As soon as I signed up, I started receiving lots of spam in my inbox. It is like they sold my email address to everyone… As far as I could tell the list was incredibly bad.”

Another report from a Utah user posted on December 14, 2009 describes a more serious offense, reminiscent of the ForeclosureWorld/ForeclosureStore expose. Below is a snippet:

“I signed up for a FREE 7 day trial of RealtyStore.com .. Once I logged in, I saw that the service wasn’t what I was looking for, so I opted out of there subscription services, well within the 7 day trial period, in fact it was within minutes of opting in.

They charged my credit card anyway… They promised they would refund my money, but as of today, I am still waiting.

In the mean time, I got an additional charge on my credit card from Foreclosure-Books.com for $29.95…When I called Foreclosure-Books.com, they informed me that I purchased an ebook through RealtyStore.com. I am still waiting for Foreclosure-Books.com to return my money and the ripoff, scam artists at RealtyStore.com.”

Users should be wary of any companies growing too big for their britches but rather use services that have been well established within the industry. Check reviews on foreclosure listing web sites for a more thorough analysis, or check out ForeclosureResearch for articles on various foreclosure listing sites.

As 2009 comes to a close let us revisit some of the top stories of the year. Undoubtedly the year was awash in news of a depressed economy and a depressed real estate market. However, with the cyclic nature of both these areas, we can only wait and see what developments arise in the coming year, and in the coming decade.

January 2009
Foreclosure Research reports mixed figures on foreclosure filings and REOs for 2008.
According to RealtyTrac there were a total of 3.16 million filings for the year. ForeclosureS.com reported 2 million filings. Read the full post here.

February 2009
For the first time in several months, all foreclosure listings companies reported a decline in foreclosure activity between December 2008 and January 2009. Read the full post here.

Foreclosure Research reports on the fraudulent practices of Foreclosure World and Foreclosure Store, specifically spotlighting several Ripoff Report complaints against the company. Read the full post here.

March 2009
A different perspective comes out of a University of Virginia study that finds “foreclosure rates really aren’t that high,” citing that the majority of foreclosures are concentrated in only a few areas. Read the full post here.

More concerns over faulty foreclosure reporting arise with blog author Elizabeth Razzi voicing her concerns. “Like most major media outlets, The Post reports foreclosure numbers from RealtyTrac each month, mostly because there’s no other source that’s better. But I don’t know anyone who uses those numbers, including reputable economists, who isn’t frustrated by the fact that the same home often gets counted more than once in their statistics.”

April 2009
Colorado passes new law which prohibits the governmental use of private foreclosure listing company statistics. The new bill (HB1196) aims to help regulate foreclosure reporting. Read the full post here.

More doom and gloom. Realtor, John Hull describes the fallout from such negative reporting, which “helped to stymie consumer confidence across our nation,” and helped “to cause fear and alarm in our community without including any of the positive aspects, which offer balanced reporting.” Read the full post here.

May 2009
RealtyTrac quote found in job loss statistic, which triggers concerns over whether or not that is their area of expertise. Read the full post here.

June 2009
An article headline reads, “U.S. foreclosures jump to record high,” misusing the word foreclosure for foreclosure filings (or notices of default). Yet further in the depths of the article a reader will find that actual foreclosures decreased for the period. Read the full post here.

July 2009
RealtyTrac makes public statement that its figures “should not be held to the same standards as statistics compiled by government agencies for the purpose of making public policy decisions.” However, in a press release located on their Web site it specifically states that “RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments to help evaluate foreclosure trends and address policy issues related to foreclosures.” Read the full post here.

July 17, 2009: Happy one year anniversary for Foreclosure Research!

August 2009
Foreclosure Research reports a deviation of 51% between ForeclosureS.com’s mid-year statistics and those of RealtyTrac’s.

RealtyTrac offers an explanation for its sparse coverage in rural areas; citing populations of less than 25,000 are many times overlooked. Read the full post here.

September 2009
ForeclosureS.com and RealtyTrac figures show only a 6% difference in Nevada foreclosure statistics compared to past differences of over 100%. Read full post here:

October 2009
Colorado posts its first foreclosure report since converting to government run foreclosure data collection. Read the full post here.

The Housing Assistance Council releases the report, “What is the housing foreclosure situation in rural America?” The report cites discrepancies with certain foreclosure statistic providers such as RealtyTrac and their sparse coverage in rural counties. Read the full post here.

November 2009
Concerns spread over the practices of online retailers. In this particular instance a professor of economics unwittingly subscribed to two services (rather than the obvious one service) when signing up for real estate listing provider RealtyTrac. Read full post here.

December 2009
A close look into the Obama administration’s Making Home Affordable Program. While created with good intentions it appears that some of the homeowners with modified mortgages are still falling behind in payments. Read the full post here.

According to a revealing article in the Hartford Courant, RealtyTrac “radically” revised its total Connecticut foreclosure filings for the month of June. The article published on August 15, 2009, written by Kenneth R. Gosselin, states that the company first reported an 80 percent decrease in foreclosure filings when actually there was an increase of 31.5 percent.

The original numbers were revised due to further investigation by Courant reporters following the surprisingly low level of filings originally reported by the foreclosure data company.

RealtyTrac first reported only 56 foreclosure filings while the revision claimed 991. That’s a head-turning difference of 1,670 percent.

In the article Darren Blomquist, a RealtyTrac spokesperson, admitted that the subscription-based company was having trouble with data collection in Connecticut. Yet it seems the company still continues to issue formal reports on Connecticut and other coverage-lacking areas.

In the past RealtyTrac has admitted to inaccurate data in some rural areas, specifically counties with less than 25,000 in population, but according to the US Census, all of Connecticut’s counties have well over 100,000 in population.

Which begs the question, “is it really just rural areas? Or perhaps smaller, less-important states are also denied the accurate reporting they deserve?

There really is only one solution, and that is to have some governmental control over foreclosure statistics in the media. If this were the case, at least the government grasps the concept of equal representation among the fifty states of America. In addition, the government would be less concerned about selling subscriptions in heavily foreclosed areas, which is obviously the main focus of the foreclosure listing company in question.

Today, July 17, 2009, marks one year since the genesis of Foreclosure Research. Our goal has been to provide informative reporting and serve as a checks and balances to the foreclosure reporting industry. Our one year anniversary further exemplifies our commitment to uncovering the truth behind foreclosure data.

Here are a few of the year’s highlights:

July 2008

• ForeclosureS.com reports a 5% increase in foreclosures while RealtyTrac reports a 3% decrease, an 8% disparity.

August 2008

• New Jersey court systems reports double the foreclosures as RealtyTrac for the same period.
• ForeclosureS.com falsely states they list over 5 million properties.

September 2008

• ForeclosureS.com and RealtyTrac report a 20% difference in August foreclosures figures.
• RealtyTrac underreports West Virginia foreclosure rates by 227%.

October 2008

• RealtyTrac states lack of coverage in rural areas with populations of 25,000 or less.

November 2008

• RealtyTrac reports 5% increase while ForeclosureS.com reports 7% decrease for the month of October.

December 2008

• Foreclosure listing company head honchos predict the 2009 housing market. Alexis McGee with ForeclosureS.com predicts a significant improvement in foreclosure rates for 2009 while Rick Sharga of RealtyTrac predicts record high foreclosure rates.

January 2009

• A reporter with the Bolivar Herald-Free Press incorrectly reports foreclosure statistic. The reporter stated 1 in 54 homeowners were foreclosed on; when in fact 1 in 54 homes received a default notice. Foreclosure Research has shown this to be a rather common reporter error.

February 2009

• ForeclosureWorld expose. Customer complaints flood Ripoff Report. Misleading foreclosure information, false pictures and various seedy practices uncovered throughout the extensive ForeclosureResearch investigation.

March 2009

• Summit County examines two foreclosure listing figures; one from RealtyTrac, another from ForeclosureFreeSearch.com. Based on official records from Summit County Recorder’s Office, figures from ForeclosureFreeSearch.com were a more accurate representation of the county rates.

April 2009

• Colorado establishes new housing bill (HB 1196) making it illegal to unitize commercial foreclosure statistics for use in public policy legislation.

June 2009

• More examples of default notices being confused for bank repossessions in the media.
• Atlanta Journal-Constitution publishes article proving RealtyTrac under reported Atlanta foreclosures rates by 100%.
• RealtyTrac representative states their reports should not be used to influence public policy while the company’s press releases tout public policy involvement.

July 2009

• ForeclosureResearch reports on a study which found 25% of foreclosures result in homeowners strategically defaulting on their mortgages despite the ability to pay.

A recent study has emerged profiling homeowners who have voluntarily defaulted on their mortgages. According to the study from Northwestern University and the University of Chicago, as many as 1 in 4 homeowners walked away from their homes, “despite the ability to make mortgage payments.”
The study titled, “Moral and Social Constraints to Strategic Defaults,” found that declining home values was a significant factor in increased defaults, surprisingly much more influential than that of job loss.
Another interesting finding was that as defaults increased, so did the likelihood that a homeowner would consider “walking away.” The study concluded this reaction was a result of a reduction in the social stigma associated with foreclosures.
It seems that foreclosures, ’strategic’ or involuntarily, are here to stay, and perhaps these homeowner profiles should be utilized more when reporting on the doom and gloom of the foreclosure crisis. Rarely do you find reports or editorials pointing out the flaws from an individual, internal perspective, and rather always see the effects due to external or economic factors.
The truth is that a majority of homeowners got into this mess without reading real estate 101. Or perhaps did not have an understanding of general market fluctuation. The number one rule in real estate is that it should be viewed as a long-term goal and not a short-term profit. This is where a number of homeowners went wrong.
Consider the study, 25% of homeowners despite being able to pay, simply did not want to make the long-term commitment. Now due to the “moral unconstraints” of flighty investors and homeowners the whole country must deal with an even larger dilemma- one where there is no easy scapegoat.

With 2009 now upon us, let us review the past year and see how the real estate market and the media reporting it have evolved from day one.

July 2008: the birth of Foreclosure Research
Key Points:
-Lack of articles publishing current decreases in foreclosures but rather focusing on increases from prior years.
-RealtyTrac reports 3% decrease in foreclosures from May to June, ForeclosureS.com reports 5.35% increase from May to June.
- No “current foreclosure” statistics available on RealtyTrac or ForeclosureS.com, making it nearly impossible to confirm their reported statistics.

August 2008
Key Points:
-Article reports conflicting numbers for New Jersey. One figure from Realty Trac, the other from a state housing authority, reflected a difference of 100%.
-Foreclosure Research reports that ForeclosureS.com offers different numbers for their press releases than what is available on the site through the search feature.
-Understanding reporter bias. Utilizing the exact same figures a reporter can use either of the following statements: 1 out of every 171 households received a foreclosure filing, 1 in 618 households were foreclosed, or 0.16% of all total households were foreclosed.
-ForeclosureS.com reports 5 million listings. Foreclosure Research investigates that 3.3 million of the 5 million listings are unaccounted for on the site.

September 2008
Key Points:
- Conflicting numbers reported for San Diego from various articles and foreclosure listing companies. One reported 2,004 foreclosures in July, another reported 2,174 and yet another reported 12,000.
- RealtyTrac reports 90,893 REOs for August while ForeclosureS.com reports 102,000 REOs for the same period.
-Rick Sharga admits to a lack of data in rural areas. This particular case set in West Virginia where faulty reporting created a roadblock for necessary housing legislation.

October 2008
Key Points:
-Further investigation into RealtyTrac’s claim that they do not focus on areas with less than 25,000 in population. Not surprisingly, the states with the lowest foreclosure rates also have the highest number of rural areas.
-REOShpere, a company that tracks foreclosure in the Minneapolis/St. Paul area, was found to utilize all RealtyTrac figures in their press releases.
-ForeclosureRadar reports 61.8% decrease in foreclosures for September, while Foreclosures.com reports a 38% decrease.
-RealtyTrac reports 81,312 homes lost to foreclosure, while foreclosures.com reports 107,500 homes lost to foreclosure.
-More massive discrepancies. RealtyTrac reports 47,956 foreclosure filings for Florida in September, while Foreclosures.com reports 406,895 filings.

November 2008
Key Points:
- Disregard for asterisks in foreclosure news articles. RealtyTrac reports a figure for Washington DC with an asterisk, citing “increases may not be as high due to data collection changes,” while media reports still utilize the figure omitting the fact that the data may not be correct.
-One foreclosure listing company reports an increase of foreclosures by 5 percent from September to October. Another foreclosure listing company reports that foreclosures decreased 7 percent, reflecting a total different of 12 percent.
-ForeclosureRadar reports a drop in California foreclosures by 39 percent in October, while RealtyTrac reports a decrease of 18 percent.

December 2008
Key Points:
-Understanding the different terminology offered in foreclosure articles: REOs, foreclosure filings, actual foreclosures, rate of default and default rate. These terms are not interchangeable and at times are confused in articles, which lead to a misrepresentation of data.
-Market experts predict 2009 foreclosures. Alexis McGee, president of foreclosureS.com, concludes that 2009 should see a decline in foreclosures and a rebound in the real estate market. Rick Sharga of RealtyTrac predicts more foreclosures in 2009 than 2008.
-Article states Idaho has drastic foreclosure problem when in fact the state saw only 61 foreclosures for the period in question. The rate can seem high due to the low level of population and a misrepresentation in data.

A reader can surmise from the year in review that foreclosure reporting agencies and the articles representing them can be inconclusive to say the least. Now let’s hope that 2009 brings in fewer foreclosures, accurate statistics and efficient reporting. Happy New Year!