Default notices hitting home

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MORESanta Anita opens winter meet Saturday with loaded card “Because of the rise in home values, much of that financial distress has been covered by the increasing amount of equity that people have had in their homes. That equity is now being created at a slower pace, and default activity is inevitably on the rise,” DataQuick president Marshall Prentice said in a statement. Still, California foreclosures are nowhere near their peak of 59,897, reached in the first quarter of 1996. The state’s foreclosure activity bottomed during the third quarter of 2004 when just 12,145 default notices were issued. DataQuick’s default statistics go back to 1992. Los Angeles activity also peaked in the first three months of 1996 when 21,444 notices were issued. The bottom also came in the third quarter of 2004 when 2,696 default notices were issued. And it looks as if the long anticipated softening of home price appreciation is settling in. The annual home appreciation rate in the state hit 22.8 percent during the second quarter of 2004 but by the end of last year it softened to 14.5 percent. Appreciation is expected to sink below 10 percent this summer, said DataQuick analyst John Karevoll. The uptick in foreclosure activity does not signal a market in distress, though. Nine years ago, when the residential real estate market tanked, foreclosures tugged property values down by almost 10 percent in some areas. But their impact on today’s market is negligible. “Basically it’s just part of the market normalizing. The numbers we had before were too low,” Karevoll said. And to get back to what’s considered a normal market Karevoll said that foreclosures would have to soar 50 to 70 percent above their current level. He also notes that only about 5 percent of owners who get default notices actually lose their homes. For example, in the 2005 fourth quarter 874 owners lost their homes across the state and 164 in Los Angeles County. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said it’s not a surprise to see foreclosure activity on the rise. “We have said that the market peaked late last year. Unit sales in the state and county are down year over year and the median (home) price has been running in a fairly narrow range.” Gregory J. Wilcox, (818) 713-3743 [email protected] 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Foreclosure activity in California increased an annual 15.6 percent in last year’s fourth quarter, partly in response to lower appreciation rates and is further proof that the hot housing market is cooling, an industry tracker said Thursday. During 2005’s final three months mortgage lenders papered 14,999 California home owners behind in their payments with default notices, the first step in the foreclosure process, said La Jolla-based DataQuick Information Systems. In Southern California 8,912 homeowners received default notices, up 19.6 percent from the same period last year, while 3,480 Los Angeles County residents received them, up 10.7 percent from the last quarter of 2004. The residential real estate market had been so hot that DataQuick stopped issuing foreclosure activity reports for a while. last_img read more