Pipeline Ratio: Check the Plumber’s Estimate in Your State

• Tweet

• Tweet

Often times, the “foreclosure pipeline” is discussed as an issue on a national, macroeconomic level. The housing data is all smashed together and out comes what the nation can expect with regards to foreclosures. At present, reports say 8. Overall, it reportedly will take the nation 8 years to work through the entire supply of foreclosure homes based on present sales rates.

Well each individual state has their own policy with regards to how foreclosures are dealt with, and therefore they are processed differently in different places, at different rates. Furthermore, some states were hit harder than others, meaning that their time spent clearing out foreclosures will be longer. Buyer demand also varies from one market to the next, which merits consideration as well. The combination of all of these factors (backlog, processing times, area demand) have been folded into a key statistic known as the “pipeline ratio”. The pipeline ratio is the estimated time it would take to clear the supply of homes in foreclosure or have seriously delinquent mortgages at the current rate of foreclosure sales.
Curious as to where your state stacks up compared to others? Check out the state-by-state analysis below, which is presented in years. That’s right, years!

Pipeline Ratio

New York
57

Washington, D.C.
57

New Jersey
52

Maryland
21

Connecticut
20

Vermont
18

Maine
16

Illinois
10

Hawaii
10

North Dakota
9

Pennsylvania
9

Florida
8

South Carolina
8

North Carolina
7

Kentucky
7

New Mexico
6

Indiana
6

Massachusetts
6

Delaware
5

Ohio
5

Mississippi
5

South Dakota
5

Arkansas
5

Oregon
4

Washington
4

Iowa
4

Tennessee
4

Texas
4

Louisiana
4

Rhode Island
3

Wisconsin
3

Oklahoma
3

Virginia
3

West Virginia
3

New Hampshire
3

Utah
3

California
3

Alabama
3

Nebraska
3

Alaska
3

Kansas
3

Missouri
2

Colorado
2

Georgia
2

Montana
2

Indiana
2

Michigan
2

Minnesota
2

Nevada
2

Wyoming
1

Arizona
1

Note: Rounded to the whole year. Source: LPS Analytics

So does this mean that it will take the Eastern Seaboard 5 decades to clear out their foreclosure pipeline? Of course not. Remember, this statistic is based on present demand levels, which is severely depressed due to buyer apathy and un-lendability. What is worth noting, however, is where one’s state stacks up compared to others, and compared to the national average. If Californians thought they had 8 long years to get in the foreclosure game, better think again.

If and when demand does pick up, the banks will likely begin to release their holdings at a faster rate as well, essentially keeping all things equal. Such activity will be reflected, however, in the pipeline ratio which would likely get a big boost in the right direction. Stay tuned as the market moves forward.