DQNews Archived Article

California Foreclosures Down

by Real Estate Analyst John Karevoll
April, 1997

La Jolla, CA.— The number of California homeowners going into foreclosure dropped for the fourth month in a row as strong home sales and higher prices absorbed distressed properties before the foreclosure process started, a real estate information service reported.

Lenders started foreclosure proceedings on 12,182 homes in the state in March. That was down 4.0 percent from 12,684 for the month before and down 21.3 percent from 15,473 for March a year ago, according to DataQuick Information Systems.

The year-ago number was an all-time high and reflected a tightening of lender foreclosure policies. Still, the current trend is downward and last March's year-over-year decline was the fourth in a row.

"A home usually won't go into foreclosure unless the homeowner owes more on it than it's worth. With today's prices going up, fewer homeowners find themselves in that situation. They can sell for enough to pay off what they owe," said Michael T. Ela, DataQuick president.

There were clear regional differences in March's numbers. Southern California saw the steepest decline (see chart), mostly because the problem was most severe there. The Central Valley is still experiencing foreclosure increases.

Homeowners most often are six to eight months behind on their mortgage payments when the bank starts foreclosure proceedings, DataQuick reported. From beginning to end, the formal foreclosure process can take as little as four months, although today it averages over seven months.

When foreclosure homes are subsequently resold by the bank, their selling prices are seven to nine percent lower than other homes on the market, putting downward pressure on prices. A year ago, that gap was over 15 percent.

DataQuick monitors real estate activity nationwide, and provides information to consumers, lending institutions, title companies and industry analysts.

Number of homes
going into foreclosure

County            March    March        Pct.
                   1996     1997        Chg.

Los Angeles       5,005    3,638   -27.3 
Orange County     1,620      865   -46.6 
San Diego         1,247      693   -44.4 
Riverside         1,333    1,054   -20.9 
San Bernardino    1,354    1,215   -10.3 
Ventura             272      209   -23.0 
So.Calif. Total  10,831    7,675   -29.1 
                                          
San Francisco       134       79   -40.9 
Alameda             657      456   -30.6 
Contra Costa        518      511    -1.2 
Santa Clara         337      318    -5.4 
San Mateo           176      133   -24.2 
Marin                60       45   -25.8 
Solano              179      247    38.4 
Sonoma              141      129    -8.5 
Napa                 35       27   -25.0 
Bay Area Total    2,236    1,946   -13.0 
                                          
Santa Cruz           70       41   -41.0 
Santa Barbara       110       98   -11.1 
San Luis Obisp       74       69    -6.5 
Monterey             83       70   -15.6 
Coast Total         337      279   -17.4 
                                          
Sacramento          717      785     9.4 
San Joaquin         268      322    19.8 
Placer               94      103    10.0 
Kern                204      230    13.2 
Fresno              254      258     1.7 
Madera               48       35   -27.8 
Merced               59       68    15.6 
Tulare              116      164    41.7 
Yolo                 52       44   -15.8 
El Dorado            59       52   -11.4 
Stanislaus          196      221    12.5 
Inland Total      2,068    2,283    10.4 
                                          
All California   15,473   12,182   -21.3

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

Copyright © 1997 DataQuick Information Systems.
All rights reserved.

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