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California foreclosure activity hits 6-year low

Published on NewsOK Modified: January 23, 2013 at 5:06 pm •  Published: January 23, 2013

"What characterized the recession were distressed sales," London said. "They were dictating the market. It was the market. It was the only market."

Short sales — when a sale price is below what is owed on the property — rose as lenders sought to avoid foreclosures as part of agreements they made with the government, DataQuick said. Short sales accounted for 26 percent of existing-home sales during the fourth quarter, up from 25.7 percent a year earlier.

Foreclosure activity remained concentrated in lower-priced areas, according to DataQuick. ZIP codes with median sales prices below $200,000 saw 5.5 default notices filed for every 1,000 homes, while ratio stood at 3.5 default notices in areas sales prices between $200,000 and $800,000 and 1.3 default notices in areas with sales prices above $800,000.

Default notices are the first step in the foreclosure process and a leading indicator. DataQuick said California had 21,227 residential foreclosures completed during the fourth quarter, down 32.4 percent from 31,260 a year earlier.

In another leading indicator that suggests foreclosures will continue to wane, the Mortgage Bankers Association recently reported that 6.56 percent of California home loans were at least one payment behind at the end of September, down from 7.68 percent a year earlier.