Foreclosures in Southland Reach Lowest Level in 5 Years

Signaling the strength of the Southland’s economic recovery, the number of homeowners falling into foreclosure dropped in November for the 13th consecutive month, reaching the lowest level in five years, a survey reported Wednesday.

“It is clearly a function of the expanding economy, and the comfort level people have with their finances right now,” said John Karevoll, an analyst with Acxiom/DataQuick Information Systems, a La Jolla-based real estate information firm.

“The lower foreclosure numbers indicate there’s a lot of confidence in the housing market and in putting money into a home,” he said.

Statewide, foreclosure proceedings fell in November to the lowest level since 1992. In all, lenders initiated 8,750 foreclosures, down 29.5% from October, and down 28.6% from a year ago, the firm found.

In Southern California, which accounts for nearly 70% of the state’s housing market, the numbers declined by 30% to 5,301. At its peak in March 1996, the region’s foreclosures hit 10,831.

Orange County led with a 34% drop in foreclosures, followed by Los Angeles with 33.4%, San Diego with 31.4%, Riverside at 29.1%, Ventura 28.3% and San Bernardino 18.8%.

The survey measures notices of default, which is the first step of the foreclosure process. The entire process takes at least four months, after which two-thirds of the homes in foreclosure are lost.

Karevoll said the drop in foreclosures means there are fewer distressed houses on the market, which aids rising property values.

In the Southland, median housing prices have jumped in the last year to $171,000, climbing 6.2%, the fastest year-to-year growth rate this decade.

As the number of foreclosures drops, so does the difference in price when compared with a comparable property sold under normal conditions.

Two years ago, Karevoll said, distressed homes cost 10% less than others, but as the inventory of foreclosures diminish, that gap has narrowed to 2% to 3%.

“More people are able to sell their homes and pay them off than was the case a year ago,” Karevoll said. “Home values have gone up, and in many cases, surpassed what is owed on the property.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Foreclosures Down

Following a statewide trend, the number homes entering foreclosure in Southern California dropped dramatically in November. Default notices sent by lenders, in thousands:

Southern California

5.3

*

Statewide

8.8

Source: DataQuick. Researched by Janice L. Jones / Los Angeles Times