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Cars drive through downtown Stockton. The bankrupt California city continues to have the nation's highest foreclosure rate.
According to RealtyTrac, a real-estate service that focuses on foreclosures, California continues to endure some of the highest levels of foreclosure activity nationwide, with seven cities in the top 10. Stockton, which recently declared bankruptcy, topped the list. One in 38 homes there is in foreclosure.
San Bernardino, a city that's headed toward bankruptcy, also made the list: its metropolitan area, which includes Riverside and Ontario, ranked number three. And Vallejo fell into a metro area, including Fairfield, that came in at number four. Vallejo declared bankruptcy in 2008 and emerged last year.
Detect a trend? It's worth noting that Both Stockton, San Bernardino, and Vallejo are all older charter cities, and that for these municipalities, a cratered housing market has been a major factor in their march to fiscal crisis and Chapter 9, the municipal equivalent of Chapter 11.
RealtyTrac pointed out another trend, however. Its midyear foreclosure market report indicated that of the top 10 worst metro areas for foreclosures in the first six months of 2012, only Atlanta saw an increase in foreclosure activity. Stockton actually saw a significant decrease: foreclosures there were down 13 percent from the second half of 2011 and down 16 percent from the first half of last year.
California remains one of the top U.S. states for foreclosures, but even though the foreclosure crisis continues to be centered in a number of its cities, the state's foreclosure rate dropped in the first half of 2012, when compared with the first half of 2011.
This contrasts with much of the rest of the U.S., where foreclosures increased in the first six months of the year. As RealtyTrac's Daren Blomquist explained to me a few weeks ago, the country's 1.5 million foreclosures won't be history until late 2013 at the earliest.