Thursday, October 18, 2012

Short Sales Speed Ahead Causing 5-Year Low in Foreclosure Activity

A stronger economy and housing market and an increase in short sales brought foreclosure activity in California down to the lowest level since 2007, according to a report from San Diego-based DataQuick.
The number of residential properties entering the foreclosure process, or that received a Notice of Default (NoD), totaled 49,026 in the third quarter of this year, down from 10.2 percent and a steep 31.2 percent drop from the 2011 third quarter, DataQuick revealed.
The most recently quarterly figure is the lowest since the first quarter of 2007, when 46,760 NoDs were recorded. NoDs reached a high of 135,431 in the first quarter of 2009.
Short sales in California were up, accounting for 26 percent of resale activity in the third quarter, up from 24 percent in the previous quarter and 22.9 a year ago.
“[D]uring the past year, we’ve seen short sales overtake the foreclosure process as the procedure of choice to deal with homeowner distress. That may change after New Year’s because the temporary ‘debt forgiveness’ feature in the tax code is set to expire as part of the so-called ‘fiscal cliff’,” explained John Walsh, DataQuick president.
Foreclosure resales were down in the third quarter, accounting for 20 percent of all resale activity in the state. In the second quarter of this year, foreclosure resales accounted for 27.8 percent of all resale activity and 34.2 percent a year ago. At its peak, foreclosure resales reached 57.8 percent in the first quarter of 2009.

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