Bottleneck ahead: Foreclosed houses for sale are piling up

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Fresh foreclosure stats indicate the pipeline of homes for sale in Los Angeles is filling up quickly -- with recently foreclosed homes.

ForeclosureRadar tracks initial foreclosure auctions, the ones usually held on courthouse steps, in which 98% of foreclosed homes are taken back by lenders, who then begin the sometimes lengthy process of bringing the foreclosed homes to market one at a time.

In February, according to ForeclosureRadar, 2,496 homes sold at these initial foreclosure auctions in Los Angeles County. During the same period, according to DataQuick, only 3,468 homes sold in normal, arm’s-length transactions in the county.

Though these numbers are apples to oranges, coming from different sources and reflecting different methodologies, the trend is clear: Foreclosed properties are piling up, and are likely to play an increasing role in setting prices in parts of the county.

Here are the DataQuick and ForeclosureRadar numbers for L.A. County from the past four months:

Month Sales (DQ) Foreclosure auction sales (ForeclosureRadar)
Nov. 4,468 1,653
Dec. 4,430 2,138
Jan. 3,398 3,201
Feb. 3,468 2,496

There’s one important point to be made about these stats: According to ForeclosureRadar’s tracking, L.A. County does not have one of the more severe foreclosure problems in California -- 34 other counties have more foreclosures per capita. Which is a round-about way of saying that, as bad as the foreclosure problem is here, it is much, much worse elsewhere in the state.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Hat tip: Cal
Photo Credit: A foreclosed house at 846 N. Clybourn Ave., Burbank, via David Silverstein.