SAN DIEGO (AP) — Home foreclosure activity in California fell to a new five-year low in the third quarter as rising prices eased pressure on homeowners and lenders, a research firm said Wednesday.
There were 49,026 default notices on residential properties from July through September, down 31.2 percent from 71,275 the same period last year and down 63.8 percent from 135,431 in the first quarter of 2009, DataQuick said.
It marked California's lowest number of default notices since there were 46,760 in the first quarter of 2007.
The numbers further eased concern about a flood of distressed sales to slow or even reverse the housing market's recovery. On the flip side, the dearth of foreclosures has meant slimmer pickings for buyers seeking to take advantage of low interest rates and an improving economy.
"There's been speculation for years that the next wave (of foreclosures) is just around the corner, and it just hasn't happened," said Lance Martin, a Coldwell Banker broker in Southern California's Inland Empire.
The median price for new and existing houses and condominiums in California reached $287,000 last month, up 15.3 percent from $249,000 a year earlier and its highest since August 2008, according to San Diego-based DataQuick.
Rising prices have given respite to struggling homeowners but further tightened supplies, especially in more affordable areas like the Central Valley and Inland Empire that were hammered by foreclosures after the 2008 financial crisis. Foreclosures continue to be concentrated in the lowest-priced areas.
Moreno Valley, a city of about 200,000 people east of Los Angeles, has about 1,400 homes for sale during normal times but supplies have hovered around 200 homes the last six months, said Paul Herrera, government affairs director for the Inland Valleys Association of Realtors.
"Right now, it's a rough place for our members," Herrera said. "We're at this hinge point where there's so little inventory, it's going to be tough for some people to stay in business."
The California Association of Realtors reported Monday that its index of unsold inventory was 3.7 months in September, down from 5.3 months a year earlier. The figure represents how long it would take to sell all existing single-family homes in California at the current sales clip. Supply in a normal market is considered to be six to seven months.
Leslie Appleton-Young, the association's chief economist, said the significant number of Californians who owe more than their home is worth has fueled speculation of a foreclosure wave.
"I don't think there's any merit or truth to it," she said.
Default notices are the first step in the foreclosure process and a leading indicator. DataQuick said California had 22,949 residential foreclosures completed during the third quarter, down 41 percent from 38,895 a year earlier.
Most of the default notices were on loans from 2005 to 2007, with the median date in the third quarter of 2006, DataQuick said.
The most recent figures from the Mortgage Bankers Association show fewer Californians are falling behind on payments, a precursor to default notices. At the end of June, 6.38 percent of loans were at least one payment late, down from 8.12 percent a year earlier.