California fourth in foreclosures per capita

RealtyTrac's year-end foreclosure report for 2007 finds California ranks first in foreclosure filings, but fourth when filings are considered on a per-household basis (That is first, as in worst, and fourth, as in fourth from worst).

First, here's how AP tells the overall story: "The number of U.S. homes that slipped into some stage of foreclosure in 2007 was 79 percent higher than in the previous year, a real estate tracking company said Tuesday."

Now some state numbers: RealtyTrac calculates the national "foreclosure rate" -- the percentage of households facing some sort of foreclosure filing -- at 1.033%. The states with the highest foreclosure rates, according to RealtyTrac, are:
Nevada    3.376%
Florida     2.002%
Michigan  1.947%
California 1.921%

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo credit: L.A. Times

Comments

[Patrick Duffy]

I think the ratio of foreclosures to total households is a much better measure than total filings; given the huge population in California of course I'd expect that our total foreclosures would be higher than anywhere else. It also shows that there was likely more overall speculative activity in Nevada and Florida than in most places of California (excluding regions such as the Central Valley and the Inland Empire, of course).

[Cal]

1 in 52 households in foreclosure (much higher in the outer areas than closer in but still breathtaking)..

I was running the foreclosure stats last night just taking the quarterly sales off of DQnews.com and comparing that to the NOD and NTS. It is clear that the market will be made at the fringes (where the boom was defined by high volumes of sales at all levels, the bust will be defined by a low volume of sales at all levels), that slow sales will continue and the servicers/asset managers will be defining this new market. Existing home sellers in a lot of areas dont stand much of a chance unless they bought quite awhile ago. Last quarter was the first quarter of NOD greater than sales for LA county and with trustee sales becoming a larger part of the market it is clear that the market deterioration is accelerating. Short sales and foreclosures will be the motivated sellers and the existing home sellers will remain in denial wondering how the prices could possibly fall so fast (but not so worried when prices leaped just as fast).

[lefty]

folks, the real numbers you need are all the historic per-capita foreclosure rates! to say 'it's up 100% compared to last year' doesn't mean anything, especially after 6 years of great appreciation!! so get your loans now before everyone else does or you may get shut out of the market. if you don't want to have to drive to riverside, buy metro L.A. today!!

[Investor]

Does anyone have historical data to see where this falls? It seems high, but I have to admit that until the last several years, I haven't been paying attention to these types of stats. I would be curious to see what the "typical" percentage was pre-2003.

[MyLessThanPrimeBeef]

Total number of foreclosure filings.

Total number of foreclosure fillings divided by total households = the ratio in the article.

total households = renting households + owning households

How about total foreclosuring filings divided by just the total number of home/condo/townhouse owners?

My guess is that California has a lower owner/renter ratio than most states, thus we might have the highest or perhaps the second highest percentage of foreclosure filings to home/condo/townhouse owners.

[smokey]

Only fourth when per-household foreclosure filings are considered.
Whew ..... For a minute there I was afraid we were in a housing bubble!

On a more serious note;

Believe it or not as recently as a year ago people who (used) to post here would argue the existence of a housing bubble until their fingers were bloody from the keyboard.

[El Guapo]

Prime Beef,

Nice catch. According to Dr Housing Bubble the rate of home ownership in LA county is 43%. Nationally it peaked at 69% (now 68%, I believe). Anyway, don't know the individual states' percentages in question, but I bet Ca. has the lowest ownship rate out of the top 4. Of course, the number (of foreclosures) is accelerating. 1 year ago, 30% of those that defaulted ended in foreclosure. Now that rate has doubled to 60%. If defaults are outnumbering sales now and 60% will be foresclosures, we're fast approaching the day when foreclosures may outpace sales. Wow!

[joeinlosangeles]

On any anonymous Internet forum, you get a certain percentage of trolls, idiots, or people who just want to argue for the sake of arguing. Anyone who frequents a blog regularly sees who those people are pretty quick and they become white noise.

--On a more serious note;

Believe it or not as recently as a year ago people who (used) to post here would argue the existence of a housing bubble until their fingers were bloody from the keyboard.

[Laker]

Based on Realty trac website, the amount of foreclosures is increasing dramatically. You all know the usual process in California of NOD->NTS->REO
Well there used to be times when actual investors will buy properties at auction and therefore the property will not fall to REO status. Today 99% of the auctioned properties are 80/20 - 100% financed and almost in all cases the mortgage company on the 1st loan is the foreclosing one. The seconds sometimes get .01-.05 cents on the dollar and sometimes even 0.
Since the market has de-facto dropped MORE than 20% from peak. (will be seen on case shiller in march-april) the amount during the NTS auction is 80% of the property and no buyers!!! that just shows you that the market is down by much more than 20%. I can safely assume/estimate that based on my local observation in the SFV, average condition properties are down 30%, yes 30%, let me repeat, thirty percent from their peak values.
And i'm talking about today. We all know that the conditions are not improving...so we should expect to see corrections of 40% down pretty soon. This is a great surprise as by all safe estimated the deflation of this bubble is to fast to comprehend.

[Cal]

I was perusing Leo Nordines inventory today:

http://www.nordine.com/residential_inv.htm

A) He has a snazzy new layout, welcome to 1997 using your HTML editor.
and
B) The line added at the top : "Offers MUST have 10% or more down + prequal from direct endorsement lender. Please fax it ONCE, not to all 3 numbers!"

So many houses were bought with zero down, now you have to have 10% down to buy them. The lenders clearly got this one backwards. You should have loose standards at the bottom of a cycle and tightening standards as affordability decreases. Maybe they'll learn, but I doubt it.

Investor : "Does anyone have historical data to see where this falls? "

Dataquick (dqnews.com) is the gold standard for California RE news, their quarterly foreclosure report just came out and said : "Last quarter's number of defaults was the highest in DataQuick's statistics, which go back to 1992. "

Just in case people dont think its getting worse there was this:
"Most of the loans that went into default last quarter were originated between August 2005 and October 2006. The median age was 22 months, up from 15 a year earlier, indicating that the pool of at-risk home loans is getting larger"
and this:
"Of the homeowners in default, an estimated 41 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 71 percent."

So more defaults are happening across a every widening pool of loans and more of the defaults are turning into actual foreclosures. Last quarter had more homes going into default in LA than homes sold. 2008 is set up for a major fall.

[Cal]

I also forgot to mention that LA County has joined all the lenders declining market lists I have had a look at, not only countrywides but others as well. That is a difference than just 30-45 days ago and means that the lenders will require an extra 5% down for any of their programs.

The highest LTV loans will only be available from FHA (which is Full Doc only) and portfolio lenders (who will go over your file with a fine tooth comb).

The cards are definitely stacked against the LA market in 2008. Interest rates are the only positive, but that favors sellers, not buyers.

[JohnnyB]

Good call Beef… Cali has home ownership rates between 5% to 17% LESS than the other states mentioned.

According to the census; (http://www.census.gov/hhes/www/housing/hvs/
annual06/ann06t13.html)

Ten years prior these were all roughly 5% less… which is probably close to where they’re headed again.

2006 Home Ownership Rates;
California = 60.2%
Florida = 72.4%
Michigan = 77.4%
Nevada = 65.7%

2006 Population Estimates;
California = 36.5 million
Florida = 18.1 million
Michigan = 10.1 million
Nevada = 2.5 million

2007 Foreclosure Rates;
California = 1.9 %
Florida = 2.0 %
Michigan = 1.9 %
Nevada = 3.4 %

California “dwarfs” all other states… and a picture’s worth a thousand words (excellent map);
http://www.realtytrac.com/blog/photos/
foreclosurepulse_photos/images/4867/original.aspx

[JohnnyB]

We’re already around the historic California foreclosure rate peak of 2% in 1997 (according to Mortgage Bankers Association data)… and with a ways to go still. Some records are not very good when broken.

http://bp2.blogger.com/_LkqsElJMaWE/
RmUbGz8sKoI/AAAAAAAAAAM/h3g8UNuXLNA/s1600-h/
foreclosure.JPG

[William Jones]

Start the Cheering!!!

WE'RE NUMBER FOUR...WE'RE NUMBER FOUR...WE'RE NUMBER FOUR!!!