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Foreclosures spike in California

But they barely make a dent in the SCV market

Posted: July 26, 2013 11:37 a.m.
Updated: July 26, 2013 11:37 a.m.
 

While California foreclosure notices jumped in the second quarter, Santa Clarita foreclosure sales have, for the most part, continued to decline since the beginning of the year.

Even if the numbers did pick up, Realtors say, any increase would barely put a dent in the local market.

Statewide, lenders filed more than 25,700 notices of default from April to June this year, according to the research firm DataQuick. That was up 38.7 percent from the previous quarter.

However, the figure is down nearly 53 percent from the second quarter of last year, and it’s the second-lowest level in seven years.

As for the Santa Clarita Valley, foreclosures only accounted for 7.3 percent of the total homes sold in June, according to data from the Southland Regional Association of Realtors.

And while the number of local default sales jumped briefly in April, they have steadily declined every month since January of this year.

Santa Clarita Realtors say any increase in foreclosures locally might actually help a little — but wouldn’t be enough to ease the inventory shortages that exist in the community.

"There is such a tremendous backlog of buyers looking for homes that the new foreclosures will not make a difference," said Sam Heller with Keller Williams VIP Properties.

Some 400 bank-owned homes are located in Santa Clarita based on public title records, said Cherrie Brown with HomeSmart real estate firm.

"If all 400 homes came on the market today, we would still not have inventory above what we had (in) inventory in 2011," Brown said.

During the recession, sales of bank-owned homes accounted, in part, for the striking decline in home prices. But the lack of inventory today has been such an issue that prices are unlikely to be affected, even if the number of foreclosures pick up, Realtors said.

"Even if more foreclosures hit the local market, it won’t be enough to make a dent in housing prices," said Connor MacIvor with Remax.

"And a lot of those houses are now priced at or above market value," said Kathy Salisbury with Triple D Realty.

As for the increase in statewide foreclosures, Heller said the banks still have property to sell off because they lack the manpower to properly complete all the paperwork.

"Many banks realized that they had created a huge overhead for themselves when they hired loan modification and foreclosure-processing personnel," Heller said.

"They later got rid of many employees to improve the banks’ financial positions."

Heller also believes that some of the foreclosures coming to market involve homeowners who received loan modifications during the recession.

But in the end, the savings weren’t large enough to help them keep their homes — and now they’re in trouble again, he said.

"They jumped from the frying pan into the fire," Heller said. "Many homeowners can no longer hang on by the tips of their fingers and will start letting go of their homes as winter arrives."

Bottom line: the low number of houses listed for sale means that even foreclosed properties are needed in the local inventory pool, Salisbury said.

And rising interest rates are driving even more buyers to the market, MacIvor said.

 

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