Foreclosures smashing sales records, depressing prices
Foreclosures have become so pervasive, they are improving sales in some locations, but not without deeply depressing home prices.
On the other side of the coin, foreclosure prevention law may be helping stem the tide.
Nationwide, one in every 475 homes was in some state of foreclosure in September and the rate of foreclosures for the third quarter soared by 71 percent, compared to a year ago, according to RealtyTrac’s September and third quarter U.S. Foreclosure Market Report.
Nevada, Florida and California posted the top state level foreclosure rates in September. Foreclosures in California accounted for nearly a third of the nation’s foreclosures.
One in every 189 housing units received a foreclosure filing during September in the Golden State, which accounted for six of the top 10 cities with the highest rates of foreclosure.
California’s foreclosure sales are yanking prices down from San Diego to Silicon Valley.
In Southern California, with a full 50 percent of all home sales coming from the foreclosure sector, sales skyrocketed a record-setting 65 percent in September, compared to a year ago, as the median price headed south of the $300,000 border, plunging more than 33 percent, according to San Diego, CA-based DataQuick.
Up north, in the nine-county San Francisco Bay Area, the weather was only slightly better. Some 42 percent of all resale homes sold in September were from the ranks of foreclosures. Sales soared 45 percent, but prices plummeted 36 percent, compared to a year ago, DataQuick reported.
The real estate research firm also said in Silicon Valley, where more than 30 percent of sales came from foreclosed properties, home prices dropped more than 27 percent even as sales charged ahead by 30 percent.
The foreclosure numbers do show a 12 percent decline from August to September this year. RealtyTrac says that’s due to new state laws that help avoid house wrecks.
“Much of the 12 percent decrease in September can be attributed to changes in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures,” said James J. Saccacio, chief executive officer of RealtyTrac.
“Most significantly, SB 1137 in California took effect in early September and requires lenders to make contact with borrowers at least 30 days before filing a Notice of Default (NOD). In September, we saw California NODs drop 51 percent from the previous month, and that drop had a significant impact on the national numbers given that California accounts for close to one-third of the nation’s foreclosure activity each month,” he added.