California Foreclosures Edge Up
October 27, 2005
La Jolla, CA.--Foreclosure activity in California showed a
year-over-year increase during the last quarter for the first time
in more than three years, the result of lower appreciation rates
and riskier loans, a real estate information service reported.
Lending institutions sent default notices to 12,568 California
homeowners during the July-to-September period. That was up 0.8
percent from 12,465 for the second quarter, and up 3.5 percent from
12,145 for last year's third quarter, according to DataQuick
Information Systems.
The last time default notices increased year-over-year was
during first-quarter 2002 when the 30,225 count was up 5.2 percent
from 28,724 a year earlier. Defaults peaked in 1996's first quarter
at 59,897. Last year's third quarter was the low. DataQuick's
default statistics go back to 1992.
"Current foreclosure levels are extremely low and this
increase is a step towards more normal activity. Foreclosures
decline when home prices go up. As home appreciation rates come
down, we expect the foreclosure numbers to go up. They could double
by the end of 2006," said Marshall Prentice, DataQuick president.
The statewide median home price rose 17.6 percent during the
third quarter to $454,000 from $386,000 a year ago. The year-ago
rate of increase was 19.5 percent.
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.
Southern California saw a year-over-year increase in
foreclosure activity of 19.9 percent, while the Bay Area saw a 13.1
percent decline and the Central Valley a 22.5 percent drop.
On a loan-by-loan basis, mortgages are least likely to go into
default in San Francisco and Santa Barbara counties. The likelihood
is highest in the Central Valley and Inland Empire.
Only about ten percent of homeowners who find themselves in
the default process actually lose their homes to foreclosure. Most
are able to stop the foreclosure process by bringing their mortgage
payments current, or by selling their home and paying home loan(s)
off.
While foreclosure properties tugged property values down by
almost ten percent in some areas nine years ago, the effect on
today's market is negligible, DataQuick reported.
Source: DataQuick Information Systems
Media Inquiries: John Karevoll (909)867-9534