Foreclosure activity in California stayed flat at a low level during the first quarter of this year, the result of robust home sales and strong appreciation rates, according to DataQuick Information Systems.
Lending institutions started foreclosure proceedings on 15,031 homeowners during the January-to-March period. That was up 0.2 percent from 14,955 for the prior three months, and down 25 percent from 20,035 for last year’s first quarter, DataQuick reported.
Fourth-quarter 2003 activity was the lowest in DataQuick’s statistics, while last quarter was the second lowest. DataQuick began collecting default data in 1992.
“There’s always going to be some default activity and we’re probably as low as we can go right now. With appreciation rates as high as they are now, homeowners who get into financial trouble can sell, pay off what they owe, and walk away with some money. Default rates will start increasing again when appreciation levels off,” said Marshall Prentice, DataQuick president.
The median price paid for a California home was $342,000 during first-quarter 2004, up 20.4 percent from $284,000 a year ago.
Foreclosure activity decreased significantly in San Luis Obispo, Los Angeles and Tulare counties. At the other end of the scale, Stanislaus, El Dorado and Yolo counties saw slightly increasing foreclosure rates.
More than 85 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 10 percent in some areas eight years ago, the effect on today’s market is negligible, DataQuick reported.
Tulare, Madera and Kern counties had the highest loan-by-loan foreclosure risk, while Orange, San Diego and San Luis Obispo counties had the lowest, according to DataQuick.
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.