California Foreclosures Down

February 7, 2002

La Jolla, CA.--The number of California homes going into foreclosure continued to decline last year, the result of increased demand for housing and steadily rising home values.

Lending institutions started foreclosure proceedings on 81,003 homeowners in 2001. That was down 8.6 percent from 88,611 for 2000, according to DataQuick Information Systems.

Last year's number is the lowest DataQuick has on record, the company's default statistics go back to 1992. Default activity peaked in 1996 when 162,597 homes were drawn into foreclosure. The numbers count Notices of Default, the first step of the formal foreclosure process.

"We're close to the bottom as far as these numbers go. Even in the best of times there is a certain floor level of foreclosure activity and we're close to that now," said Mike Ela, DataQuick's president.

"The reason these numbers are so low is that home values are still rising. In general that means that fewer and fewer homeowners owe more on their property than that property is worth. If they get in financial trouble, they can sell, pay off what they owe, and walk away with some money. The situation was the opposite in the mid 1990s when values were in decline," he said.

The median price paid for a California home was $230,000 last year, up 10.0 percent from $209,000 for 2000. Home values are increasing even faster in entry-level markets where default rates are generally higher.

Two-thirds of the homeowners in default were able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying the mortgage off. In the mid 1990s only half the distressed homeowners were able to do that.

DataQuick, a subsidiary 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.

While foreclosure properties tugged property values in some areas down by almost ten percent six years ago, the effect on today's market is negligible, DataQuick reported.

In addition to the decline in foreclosures, there is unremarkable activity among other market stress indicators including loan-to-value ratios, seller financing and other unconventional financing usage, shifts in market mix, turnover rates and non-owner occupancy rates, DataQuick reported.

Tulare, Kern and Fresno counties had the highest relative foreclosure rates, while Marin, San Francisco and San Mateo counties had the lowest, DataQuick reported.

Notices of Default
recorded on residential property

County	2000	2001	%Chg
Los Angeles	25,594	24,531	-4.2%
Orange County	3,956	3,660	-7.5%
San Diego	4,115	3,412	-17.1%
Riverside	6,969	6,378	-8.5%
San Bernardino	10,369	8,640	-16.7%
Ventura	1,354	1,395	3.1%
Southern California Total	52,357	48,017	-8.3%
San Francisco	523	470	-10.1%
Alameda	2,856	2,662	-6.8%
Contra Costa	2,674	2,484	-7.1%
Santa Clara	2,062	2,046	-0.8%
San Mateo	748	746	-0.3%
Marin	255	267	4.6%
Solano	1,304	1,169	-10.4%
Sonoma	595	541	-9.0%
Napa	195	182	-6.8%
Bay Area Total	11,211	10,567	-5.8%
Santa Cruz	280	263	-5.8%
Santa Barbara	678	597	-12.0%
San Luis Obispo	428	336	-21.7%
Monterey	465	428	-7.9%
Coast Total	1,852	1,624	-12.3%
Sacramento	5,486	4,832	-11.9%
San Joaquin	2,726	2,277	-16.5%
Placer	762	666	-12.6%
Kern	3,411	3,120	-8.5%
Fresno	4,041	3,849	-4.8%
Madera	636	630	-0.8%
Merced	755	672	-11.0%
Tulare	2,682	2,566	-4.3%
Yolo	389	354	-9.2%
El Dorado	368	290	-21.3%
Stanislaus	1,934	1,539	-20.4%
Inland Total	23,190	20,795	-10.3%
All California	88,611	81,003	-8.6%

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

Copyright © 2002 DataQuick Information Systems.
All rights reserved.