Explaining Southern California's economy

In Southern California, declining foreclosures are helping home prices rise

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A "for sale" sign stands outside a home in Pasadena, California. Prices in Southern California are gaining strength as foreclosure activity ebbs. And according to DataQuick, August sales haven't been this good since 2006.

RealtyTrac, a Southern California-based real-estate information service, released a report yesterday on August foreclosures that showed a big 42-percent drop in foreclosure starts in the state.

Now DataQuick, also SoCal-based, has put out an August report in Southland home prices that indicates a decline in foreclosures is helping prices in the region gain some upward momentum. This is from the company's press release:

Home prices have edged higher this year as greater demand, triggered by super-low mortgage rates and a mild economic recovery, has been met by a shrinking supply of homes for sale. But recent gains in the median sale price also reflect two other trends: a sharp drop in foreclosure resales, which often sell at a steep discount and are concentrated in lower-cost areas, as well as a substantial increase in mid- to high-end transactions.

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August foreclosures: California is finally getting a break

Foreclosure

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For sale signs are posted on a foreclosed house in Glendale, California. August saw California get some relief from the ongoing crisis.

California has been hit hard by the foreclosure crisis. But it now looks as if the market is working through the state’s huge inventory of distressed properties. Foreclosures starts were down nationwide from last August by 13 percent, snapping a three-month streak of increased. In California, the news was better: foreclosure starts in the state fell by 42 percent, according to RealtyTrac.

Foreclosures in California have been on the ebb for the entirety of the year, but that doesn’t mean the state is out of the woods. We still have the third highest foreclosure rate: 1 in every 340 houses. Only Illinois and Florida were higher.

And California cities continue to struggle with the crisis. The seven highest foreclosure-rate cities for August are all in the state, with Modesto at number one. And all but two of them saw their foreclosure rate increase since July.

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California and Stockton top foreclosure statistics nationwide

Foreclosure

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For sale signs are posted on a foreclosed house in Glendale, California. Foreclosures in the state are falling, but it still had the worst rate in July.

Sometimes, the good news and the bad news are the same thing. That's the takeaway from the July 2012 foreclosure report that Irvine-based RealtyTrac just released. According the the foreclosure marketer's crunching of the numbers, California had the country's highest foreclosure rate in July, with "one in every 325" homes at risk of reverting to bank ownership. That's despite the foreclosure rate dropping in California by 11 percent since June and 25 percent since June of 2011.

Like I said, good-bad news.

Meanwhile, at the municipal level, California sports the top four cities for foreclosures, with Stockton — now bankrupt — topping the list, with one in every 135 homes in foreclosure. Vallejo-Fairfield, Riverside- [also bankrupt] San Bernardino-Ontario, and Modesto follow Stockton. Then in come Palm Bay-Melbourbe-Titusville and Tampa-St. Petersburg-Clearwater (numbers five and nine, respectively) in Florida to break up a sweep of the top ten by California's beleaguered cities.

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California cities top foreclosure statistics in first half of 2012

Stockton, CA Leads Nation In Rate Of Foreclosures

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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.

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Southern California still struggling with foreclosures

Foreclosures Spike As Banks Accelerate Loan Default Notices

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A for sale sign is posted in front of house in Glendale, California. Foreclosure remains a big problem in Souther California, but it seems to be getting gradually better.

DataQuick, which tracks the U.S. housing market, has released new data on foreclosures in California. The good news is that foreclosures decelerated in the second quarter of 2012 statewide. The bad news is that in Southern California, the foreclosure situation has barely changed over last year. Making that bad news worse is that SoCal's had the highest number of foreclosures in the state in the second quarter, and more than twice and many as the next-worst region, the Central Valley. 

The second quarter of 2011 saw around 30,000 notices of default (NOD), the first step in the foreclosure process, issued in SoCal. The same period in 2011 saw roughly the same, diminished by only about 2 percent.

The Bay Area, meanwhile, saw NODs drop by more than 13 percent, with an overall number of foreclosures that was already a third of what we're witnessing in SoCal.

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