DQNews Archived Article

California Foreclosures Up

by Real Estate Analyst John Karevoll
April, 1998

La Jolla, CA.— Foreclosure activity in California edged up in March, the first increase in nine months, a real estate information service reported.

Lenders filed a total of 13,355 Notices of Default on homeowners in March. That was up 17.8 percent from 11,333 for February and up 9.6 percent from 12,182 for March last year, according to DataQuick's Products Division.

A Notice of Default is the first step of the formal foreclosure process. The year-over-year increase was the first since June 1997 when the number went up 2.7 percent to 12,026. The all-time high was reached in March two years ago at 15,475.

"It looks like lenders are getting losing patience when it comes to mortgage delinquencies. With today's strong real estate market and rising prices, they figure that most distressed homeowners can sell their homes and pay the mortgage off," said Mike Ela, DataQuick leader.

"The market fundamentals are strong, with rising prices and sales counts at the highest of the decade. The overall foreclosure trend is still downward and we expect 1998 foreclosure activity to be down by over 25 percent compared to 1997," Ela said.

The trend is different from region to region. The March foreclosure count rose 23.0 percent year-over-year in the Central Valley, by 10.1 percent on Southern California and it declined by 8.5 percent in the Bay Area.

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

Foreclosure activity does not have the negative impact on California's real estate market that it used to. While foreclosure homes used to tug market prices down by more than ten percent two years ago, the drag is currently less than five percent and is isolated to just a few local markets, DataQuick reported.

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

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