California Foreclosures at Lowest Level Since 2007
(LOS ANGELES) -- The foreclosure rate in one of the hardest-hit states is at a new low, a real estate data firm says.
Foreclosure activity in California hasn't been this low since the start of the recession in the beginning of 2007. The firm DataQuick says foreclosures are down 64 percent compared to 2009.
"A foreclosure happens when a homeowner owes more on the property than the property's worth. Otherwise it could be sold and the mortgage paid off. So foreclosures go up when home values go down. Prices in most areas today are up significantly from their low point in early 2009," said John Walsh, DataQuick president.
The areas still seeing foreclosures are now mainly in lower-priced neighborhoods where homes are selling at below $200,000. The least likely areas for foreclosures are now counties in the very pricey San Francisco Bay Area.
DataQuick attributes the decrease in mortgage defaults to a strong economy and housing market as well as more short sales.
"Additionally, during the past year," Walsh said, "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'," he said.
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