Foreclosure inventory continues to decline in California

Central Valley Business Times

Foreclosure inventory continues to decline in California 

DISCOVERY BAY 
July 11, 2012 4:46pm

    

•  But not everywhere in the Central Valley

•  ‘Negative equity, not foreclosures, are the problem’

The number of homes in California sold through foreclosures in June dropped by 13.4 percent from May. And when compared to a year earlier, the courthouse steps sales were down 48.8 percent, according to a new report from ForeclosureRadar Inc., a Discovery Bay-based foreclosure information company.

In addition, initial foreclosure filings were basically flat, being down 0.93 percent over May and down 3.14 percent from June 2011.

That wasn’t the case in many parts of the epicenter of the nation’s mortgage meltdown – the Central Valley.

Here are ForeclosureRadar’s figures for Central Valley initial filings in June, with the raw number first followed by the percentage difference from May and then the percentage change from June 2011:

• Butte County: 68; -46.46 percent; -46.88 percent

• Fresno County: 578; -4.78 percent; +3.21 percent

• Kern County: 547; -17.25 percent; -5.36 percent

• Kings County: 127; -24.40 percent; +6.72 percent

• Madera County: 68; -31.31 percent; -20.93 percent

• Merced County: 154; -12.00 percent; +3.36 percent

• Sacramento: 1,148; -6.36 percent; -5.12 percent

• San Joaquin: 577; -2.37 percent; +9.49 percent

• Stanislaus: 404; -4.04 percent; -0.49 percent

• Tulare: 322; +1.58 percent; +18.38 percent

• Yolo: 87; +10.13 percent; +10.13 percent

• Yuba: 66; +17.86 percent; -13.16 percent

“We already have significantly low home sales in the market today, and with the declining level of foreclosure sales, the inventory will continue to decrease,” says the report. In California, banks take on average 272 days to resell properties they take back at auction, thus, Realtors, investors, and homebuyers should brace themselves for significantly less inventory in next years' selling season, it says.

"Today California Gov. Jerry Brown signed into law the Homeowner Bill of Rights, an anti-foreclosure package which naively thinks that slowing foreclosures will benefit homeowners and the economy by leaving those owners stuck in their prison of debt,” says Sean O'Toole, founder and CEO of ForeclosureRadar.

“We've long said negative equity, not foreclosures, are the problem, and this bill, like almost all government efforts to date, does nothing to truly help underwater borrowers. Fortunately this bill was watered down significantly from its original form, so we don't expect it will have the same impact that we've seen from more aggressive legislation in Nevada," he says.

Additionally any impact on foreclosures sales, or REO resales, is more than a year a way based on current foreclosure timeframes. Mr. O’Toole says.

“The most ironic part of this bill’s passage is that foreclosures have already plummeted, and that the real housing crisis in now a lack of homes available for sale. Next spring, we expect there will be half as many REO's available for sale in California, significantly impacting overall home sales and hurting homebuyers, investors, real estate related services and the economy," he says.