DQNews Archived Article

California Foreclosures

by Real Estate Analyst John Karevoll
April, 2000

La Jolla, CA.— A four-year decline in California's foreclosure rate appears to be leveling off, a real estate information service reported.

Lending institutions started foreclosure proceedings on 25,552 homeowners during the first quarter of this year. That was up 2.9 percent from 24,841 for the previous quarter, and down 4.3 percent from 26,694 for the first quarter a year ago, according to DataQuick.

There have been year-over-year declines the past 13 quarters. Peak foreclosure activity was registered during first-quarter 1996 when lenders started foreclosure proceedings on 44,665 homeowners.

"Even in the best of times there's going to be some foreclosure activity, and we may be near that floor level right now. With the emergence of so-called sub-prime lending in recent years, we could see the numbers start to go up a bit," said Mike Ela, DataQuick president.

The Bay Area saw a 19.3 percent year-over-year decline in foreclosure activity. In Southern California the decline was 3.6 percent, while the Central Valley saw a 2.8 percent increase in the number of homes going into foreclosure.

The likelihood of a home going into foreclosure is highest in Tulare and San Bernardino counties. It is lowest in Marin County, DataQuick reported.

DataQuick, which was sold last week to Vancouver-based MacDonald Dettwiler and Associates, 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 all 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.

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

Copyright © 2000 DataQuick Information Systems.
All rights reserved.

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