DQNews Archived Article

California Foreclosures Down

by Real Estate Analyst John Karevoll
May, 1998

La Jolla, CA.— After an unexpected uptick in March, foreclosure activity in California resumed its downward slide in April, the result of increased sales and rising prices, a real estate information service reported.

Lending institutions started foreclosure proceedings on 11,410 California houses and condos in April. That was down 14.7 percent from 13,373 for March, and down 4.1 percent from 11,899 for April a year ago, according to DataQuick's Products Division.

The all-time peak was reached in March 1996 when 15,475 homes went into foreclosure. Foreclosure activity in California has generally been in decline the last eighteen months.

"Because of the current rise in real estate values, fewer and fewer homeowners find themselves owing more on their property than the property is worth. If there is financial distress in a household, because of job loss or something, most homeowners can now sell and pay off the mortgage. That wasn't always an option a year or two ago," said Mike Ela, DataQuick leader.

The decline in foreclosure activity is strongest in the Bay Area, slight in Southern California, and it is still going up in the Central Valley.

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

While foreclosure activity is declining in California, current levels are higher than expected. Contributing factors are changing attitudes towards foreclosure, and the rise in recent years of so-called "sub-prime" lending activity, DataQuick reported.

The negative impact of foreclosure activity on sales prices has declined. While foreclosure homes tugged sales 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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