DQNews Archived Article

California Foreclosures Down

by Real Estate Analyst John Karevoll
October, 2000

La Jolla, CA.— The number of California homes going into foreclosure continued to decline last quarter, the result of a strong economy and rising home values, a real estate information service reported.

Lending institutions started foreclosure proceedings on 21,006 homeowners during the third quarter of this year. That was down 2.0 percent from 21,440 for the previous quarter, and down 12.9 percent from 24,111 for the third quarter a year ago, according to DataQuick Information Systems.

Last quarter's number was the lowest since 18,806 for first-quarter 1992. The all-time peak was first-quarter 1996 when 44,665 homes went into foreclosure. "We may be nearing a point where the numbers stop declining. There is a base level of foreclosure activity, and we may be near it. Even in the best of economic times, some households can experience financial turbulence," said Mike Ela, DataQuick president.

The number of foreclosure proceedings actually increased slightly in the Bay Area, from 2,664 in the second quarter to 2,710 in the third. In Southern California the number decreased from 12,634 to 12,154. The real estate market in the Bay Area recovered well ahead of markets in the rest of the state, and is probably flatening out.

DataQuick, a business unit of 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.

Foreclosure activity tends to decline when home prices go up, because homeowners can sell for more than they owe on the property. The median price paid for a California home was $210,000 during the third quarter. That was up 11.1 percent from $189,000 a year ago.

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.

Tulare, Fresno and Kern counties have the highest foreclosure rates, while Marin, San Mateo and San Francisco counties have the lowest.

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

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