California Foreclosures Down

November 17, 2003

La Jolla, CA.--Foreclosure activity in California remained low during the third quarter, the result of strong home sales and robust appreciation rates.

Lending institutions started foreclosure proceedings on 15,814 homeowners during the July-to-September period. That was up 3.1 percent from 15,333 for the prior three months and down 12.0 percent from 17,974 for last year's third quarter, according to DataQuick Information Systems.

Second-quarter activity was the lowest in DataQuick's statistics, while last quarter was the second lowest. DataQuick began collecting default data in 1992.

"Default activity is always low when appreciation rates are strong because the increase in equity means that few homeowners owe more on their property than they owe on it. If they get into financial trouble they can sell, pay off what they owe and walk away with the difference. When appreciation rates level off, we'll see foreclosure rates increase," said Marshall Prentice, DataQuick president.

The median price paid for a California home was $323,000 last quarter, up 18.6 percent from $272,000 a year ago.

Foreclosure activity decreased significantly in Fresno and San Bernardino counties where home value increases occurred later than in the rest of the state (see table). At the other end of the scale, counties which saw early home price increases like San Francisco, San Mateo and Santa Clara are now seeing flat or slightly increasing foreclosure rates.

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.

More than eighty-five percent of the homeowners who found themselves 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 of all distressed homeowners were able to do that.

While foreclosure properties tugged property values down almost ten percent in some areas seven 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, San Joaquin and Kern counties had the highest loan-by- loan foreclosure risk, while San Luis Obispo and Orange counties had the lowest, DataQuick reported.

Notices of Default
recorded on residential property

County	3Q2002	3Q2003	%Chg
Los Angeles	4,883	4,086	-16.3%
Orange County	753	610	-19.0%
San Diego	787	732	-7.0%
Riverside	1,330	1,143	-14.1%
San Bernardino	1,649	1,296	-21.4%
Ventura	306	235	-23.2%
SoCal Total	9,708	8,102	-16.5%
San Francisco	109	134	22.9%
Alameda	817	718	-12.1%
Contra Costa	718	682	-5.0%
Santa Clara	637	735	15.4%
San Mateo	191	230	20.4%
Marin	80	68	-15.0%
Solano	299	289	-3.3%
Sonoma	165	131	-20.6%
Napa	47	44	-6.4%
Bay Area Total	3,063	3,031	-1.0%
Santa Cruz	84	93	10.7%
Santa Barbara	137	133	-2.9%
San Luis Obispo	79	52	-34.2%
Monterey	83	114	37.3%
Coast Total	383	392	2.3%
Sacramento	1,046	844	-19.3%
San Joaquin	714	814	14.0%
Placer	171	162	-5.3%
Kern	591	521	-11.8%
Fresno	845	625	-26.0%
Madera	141	80	-43.3%
Merced	135	163	20.7%
Tulare	600	529	-11.8%
Yolo	99	75	-24.2%
El Dorado	76	94	23.7%
Stanislaus	402	382	-5.0%
Inland Total	4,820	4,289	-11.0%
All California	17,974	15,814	-12.0%

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

Copyright © 2003 DataQuick Information Systems.
All rights reserved.