One sector of California’s housing market is as a stable as the housing market was in 2005, which is considered a good thing.
During the year’s second quarter the number of properties falling into foreclosure across the state remained at their lowest level since 2005.
Over the last three months lenders issued 17,524 defaults to property owners who were seriously behind in their loan payments, said La Jolla-based DataQuick. That’s down 32 percent from the 2013 second quarter and 9 percent from the first quarter.
And it’s the lowest since the 2005 fourth-quarter when 15,337 defaults were recorded.
Statewide defaults peaked at 135,431 in the first quarter of 2009.
Foreclosure activity fell by similar amounts in Los Angeles and San Bernardino counties, the company said.
In Los Angeles County defaults fell nearly one-third 3,836 properties.
In San Bernardino County defaults declined 29 percent to 1,543 properties.
“There is no question, this is good news. They have been declining quite steadily since 2009,” said Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University, Pomona.
The low level of foreclosure activity reflects a strengthening economy and rising home values, although price increases are now showing signs of moderating.
“The the quarterly flow of NoDs (defaults) since early last year has been remarkably flat, and probably doesn’t reflect any meaningful changes in trends. The overall trend is that homeowner distress continues to decline because of a stronger economy and rising home prices,” DataQuick analyst John Karevoll said in a statement.
One thing that has not changed is the footprint of toxic loans that led to the housing price bubble and helped trigger the Great Recession.
Most of the loans going into default in the second quarter are still from the 2005-2007 period when the market was overheating. “That has been the case for more than five years, indicating that weak underwriting standards peaked then,” DataQuick said.
Foreclosures remained at a seven-and-a-half year low in the second quarter.
Statewide foreclosures fell 25 percent to 7,392 properties, according to DataQuick. That’s the fewest since since 6,078 in the fourth quarter of of 2006.
The record high is 79,511 in the third quarter 2008 and the record low is 637 in the second-quarter of 2005.
In Los Angeles County foreclosure fell 26 percent to 1,222 properties and in San Bernardino they decreased 15 percent to 825.
