A stronger economy, lower unemployment and higher home values contributed to the lowest number of foreclosure starts since 2005, reported Irvine-based CoreLogic DataQuick. At the same time, July home sales in California hit a three-year low as supply dwindled and higher prices pushed investors out of the market and thinned out the group of buyers.
Notices of Default (NoDs) in California in the April through June 2014 period were down 8.8. percent from the prior quarter and 31.9 percent from the same quarter in the prior year. The 17,524 NoDs was the lowest since Q4 2005. Most of the loans going into default are from the 2005-2007 period.
Riverside County foreclosures are down 31.8% from 2,522 in Q2 2013 to 1,720 the same quarter this year.
California homeowners were twelve months and $27,601 (median) behind on a median $309,083 mortgage when the lender filed the Notice of Default.
Wells Fargo, Bank of America and Nationstar were the most active in filing NoDs.
On average, the formal foreclosure process took 8.7 months compared to 9.5 months the previous quarter.
Foreclosure resales accounted for 6.1 percent of resale activity last quarter (5.2 percent last month); short sales made up 5.8 percent in the quarter. That is down from 12.7 percent the previous year.
Overall sales in June are down 1.4 percent from the same month last year; July’s numbers show a 12.4 percent decline. Price appreciation is easing as July’s median of $413,000 was 0.5% lower than June, although still up 7.3% from the previous year. Sales of homes below $500,000 fell 17.2 percent year-over-year; sales below $200,000 fell 37.1 percent. In July of 2013, 33.2 percent of sales were above $500,000.
Riverside County showed a drop of 10.3% in sales volume from 3,675 homes in July of 2013 to 3,295 homes in July of 2014. Pricing is up 9.8% from $265,000 to 291,000.
Local cities showed July year-over-year increases: Lake Elsinore (14.31 percent), Menifee (11.61 percent), Murrieta (8.8 percent), Temecula (10.17 percent), and Winchester (15.84 percent).
Fewer foreclosures and higher prices on a year-to-year basis signal a recovering economy, but slower home sales and a leveling off of price increases indicate a market slowdown in the last two quarters.