DQNews Archived Article

California Foreclosures Decline Slowly

by Real Estate Analyst John Karevoll
March, 1998

La Jolla, CA.— Although foreclosure activity in California continued to go down in February as a result of the growing economy and rising home values, the current rate of decline is not as steep as expected, a real estate information service reported.

Lenders filed a total of 11,333 Notices of Default on houses and condos in February. That was down 5.5 percent from 11,993 for January, and down 10.7 percent from 12,684 for February last year, according to DataQuick Information Systems.

A Notice of Default is the first step of the formal foreclosure process. The year-over-year decline was the fourteenth in a row, and well below the all-time peak in March 1996 when 15,475 homeowners were drawn into the foreclosure process.

"Today's foreclosure numbers not going down at the same rate that they went up at six years ago, even when you factor in the differences in decline and growth patterns. It looks like the recession led to a greater acceptance of foreclosure as a financial tool. It's clear that many homeowners are letting their homes go into default under different circumstances than they would have five or ten years ago," said Mike Ela, DataQuick leader.

In times of economic distress, the likelihood of a homeowner going into default increases when the difference between what the property is worth and what is owed on it gets bigger. Foreclosure levels skyrocketed when home values tumbled during the first half of the decade.

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

Foreclosure activity in California is still expected to decline this year, and at a faster pace. The rise in home values, which first made itself felt in high-end markets more than a year ago, is now making itself felt in mid- and entry-level markets, DataQuick reported.

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

Copyright © 1998 DataQuick Information Systems.
All rights reserved.

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