Foreclosures Up. Big Surprise.

Across the country, foreclosures are up a whopping 71% in the third quarter  over the same period last year.  Almost 766,000 homeowners  nationwide had a sheriff show up at the door and with a foreclosure complaint in hand.

Six states made up for nearly 60% of the list: Arizona, California, Florida, Michigan, Ohio, and Nevada.   Actually, in California Notices of Default, the first stage in the foreclosure process, are down significantly–from 121,673 in the second quarter of this year to 92,240 in the third quarter. Despite appearances,  that’s not really not much to cheer about.  A new state law came online October 1. That law ia requires lenders in California  to contact defaulting homeowners first, then to wait 30 days before beginning the foreclosure process.  So, that drop is a delay, not any really good news.

Maybe Californians behind on their mortgages will slide through Christmas, but the first quarter of 2009 looks bleak indeed for the many homeowners now behind on their mortgages.

The good news Southern California home sales are up. Prices are now at 2003 levels.
“Sinking home values continued to drive home sales in September as bargain hunters snared properties at 2003 prices.The median Southern California home sales price was $308,500 in September, the lowest since May 2003 and down 33% from the September 2007 peak of $462,000, according to real estate research firm MDA DataQuick.

The number of homes sold in Los Angeles, Orange, San Bernardino, Riverside, Ventura and San Diego counties shot up 65% compared with September 2007. Fifty percent of homes sold last month had been foreclosed.

Of course, even the good news comes with a caveat. These homes were purchased mid to late summer before the horrific slide on Wall Street, before the Bailout and before the news that even corporate giants like Ford and General Electric were facing economic extinction. As usual, with bargains galore, many are too scared to buy.

Foreclosure World 2008

News today of a 400-point stock market dive, an $11 rise in crude oil to $139 a barrel and the highest jump in unemployment since 1986 is just peachy. Of course, it’s really worse than that because Americans are also losing their homes at an unprecedented clip.

In fact, for the first quarter of 2008 [Q108], foreclosures increased in 46 out of 50 states year over year and in 90 of the 100 biggest metro areas. About 20 states saw decreases in their foreclosure rates, including Michigan, Ohio and Indiana. Huge increases in foreclosures in the BIg Four–California, Florida, Nevada and Arizona-accounting for 42% of all foreclosures–offset the modest decreases in other states.

How bad off are we compared to others?

Overall, for Q108 foreclosures are up nationwide 23% over Q407 and up 112% over Q107, that is, one year ago. Nevada was top loser with 1 in every 54 households in foreclosure, up 3.9% over Q407 and up 139% over one year ago. California clocks into the number 2 spot with almost 170,000 foreclosures in Q108, one in every 78 households, up 32% over Q407, and up 213% over Q107. What explains the difference in the year over year percentages? Nevada has been in this process longer and is closer to the bottom than California. California is just beginning to feel the pain, hence up 213% over last year. California with 13% of the nation’s mortgages accounted for 21% of the homes entering the foreclosure process.

Next is line is Arizona, with 1 in every 94 homes in foreclosure up 45% over Q407 and 245% over Q!07. Like California, Arizona is just getting into this morass.

Florida at number 4 is in some respects worse off with 1 in every 97 households in foreclosure, up 17% over Q107 and 178% over Q107. Florida has 8% of the nation’s mortgages and 15% of all foreclosures. But, that more modest increase over Q07, horrible though it is, shows that Florida is closer to the bottom than the other three states.

How bad off are we really here in California? It’s pretty bad. Foreclosures in the top or worst metro areas include Stockton as numero uno, followed by Riverside-San Bernardino megalopolis, then little SoCal, Las Vegas as number 3. Then, 4, Bakersfield, 5,Sacramento, 9, San Diego, 10, Oakland, 12, Fresno, 17, L.A. and rounding out the terrible twenty, Orange County, no. 20. So, California cities take 9 of the top 20 spots as worst foreclosure metro areas.

Those Lakers better do something to cheer us up.