by Calculated Risk on 10/17/2012 02:54:00 PM

From DataQuick: California Foreclosure Activity Lowest Since Early 2007

Three and a half years after peaking, the number of California homes entering the foreclosure process fell last quarter to the lowest level since the early stages of the housing bust. Mortgage default filings hit their lowest point since first-quarter 2007, due in large part to a stronger economy and housing market and more short sales, a real estate information service reported.

A total of 49,026 Notices of Default (NoD) were recorded on residential properties during the third quarter. That was down 10.2 percent from 54,615 for the prior three months, and down 31.2 percent from 71,275 in third-quarter 2011, according to San Diego-based DataQuick.

Last quarter's number was the lowest since 46,760 NoDs were recorded in first-quarter 2007. NoDs peaked in first-quarter 2009 at 135,431. DataQuick's NoD statistics go back to 1992.
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Short sales - transactions where the sale price fell short of what was owed on the property - made up an estimated 26.0 percent of statewide resale activity last quarter. That was up from an estimated 24.0 percent the prior quarter and up from 22.9 percent of all resales a year earlier. The estimated number of short sales last quarter rose 19.0 percent from a year earlier.

Foreclosure resales accounted for 20.0 percent of all California resale activity last quarter, down from a revised 27.8 percent the prior quarter and 34.2 percent a year ago. The figure peaked at 57.8 percent in the first quarter of 2009. The level of foreclosure resales - homes foreclosed on in the prior 12 months - varied significantly by county last quarter, from 5.5 percent in San Francisco County to 35.5 percent in Sutter County.

NoD filings fell last quarter across all home price categories. But mortgage defaults remained far more concentrated in California's most affordable neighborhoods.

Click on graph for larger image.

This graph shows the number of Notices of Default (NoD) filed in California each year. This year will probably the lowest since 2006.

The current level is still far above the peak of the previous housing bust (in 1996). Note: House prices stopped falling in 1996 in California, even though foreclosure activity was still historically high in 1997.