DQNews Archived Article

California Foreclosures

by Real Estate Analyst John Karevoll
January, 2000

La Jolla, CA.— Foreclosure activity in California continued to decline last year, the result of a robust economy and rising home values, a real estate information service reported.

Lending institutions started foreclosure proceedings on 101,053 homeowners statewide during 1999. That was down 17.7 percent from 122,797 for the prior year, according to DataQuick.

Last year's number was well below the 1996 peak of 162,597, and was the lowest since 100,573 in 1992. The decline in foreclosure activity was strongest in Southern California, while it was weakest in the Central Valley (see chart).

"The decline would have been stronger except that a category of risky, more expensive loans emerged a couple of years ago. Defaults from those loans are adding to the current foreclosure statistics. Despite that, we expect the decline in foreclosure activity to continue this year," said Mike Ela, president of DataQuick.

Tulare and San Joaquin counties have the highest foreclosure rates relative to mortgage lending volume, while Marin and San Mateo counties have the lowest rates.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The numbers count recorded Notices of Default, the first step of the formal foreclosure process.

Two-thirds of the homeowners in default are able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying the mortgage off. Two years ago, only half the distressed homeowners were able to do that.

The effect of foreclosure activity on sales prices is now negligible. While foreclosure homes tugged sales prices down by more than ten percent three years ago, the drag is now less than two percent, and is isolated to just a few local markets, DataQuick reported.

The state's real estate market is currently in a state of unprecedented equilibrium, with sustainable rates of increase in home values and sales counts in all markets and home categories. In addition to the decline in foreclosures, there is unremarkable activity among other market stress indicators including loan-to-value ratios, ARM financing rates, turnover rates, seller financing and non-owner occupancy rates.

Number of recorded Notices of Default

County	3Q97	3Q98	%Chng
Los Angeles	37,729	28,524	-24.4%
Orange County	6,736	4,830	-28.3%
San Diego	6,137	4,647	-24.3%
Riverside	10,394	8,295	-20.2%
San Bernardino	13,136	11,308	-13.9%
Ventura	1,954	1,440	-26.3%
Total	76,086	59,045	-22.4%
San Francisco	681	656	-3.6%
Alameda	4,135	3,836	-7.2%
Contra Costa	4,527	3,650	-19.4%
Santa Clara	2,667	2,660	-0.3%
San Mateo	1,120	884	-21.1%
Marin	380	302	-20.5%
Solano	2,155	1,726	-19.9%
Sonoma	935	873	-6.6%
Napa	315	239	-23.9%
Bay Area Total	16,914	14,827	-12.3%
Santa Cruz	423	310	-26.7%
Santa Barbara	883	697	-21.1%
San Luis Obispo	662	586	-11.5%
Monterey	650	552	-15.1%
Coast Total	2,617	2,145	-18.1%
Sacramento	7,438	6,408	-13.8%
San Joaquin	3,685	3,390	-8.0%
Placer	1,048	786	-25.1%
Kern	3,270	3,127	-4.4%
Fresno	4,136	4,238	2.5%
Madera	700	625	-10.6%
Merced	838	849	1.3%
Tulare	2,695	2,801	3.9%
Yolo	539	389	-27.7%
El Dorado	423	407	-3.6%
Stanislaus	2,410	2,017	-16.3%
Inland Total	27,180	25,037	-7.9%
All California	122,797	101,053	-17.7%

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

Copyright © 2000 DataQuick Information Systems.
All rights reserved.

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