2nd Quarter Foreclosures on O.C. Homes Decline 3.8% : Housing: Lower selling prices on units taken over by lenders are still a drag on the market, but the county is in better shape than many other areas in state.
Home foreclosures fell by a healthy 3.8% in Orange County during the second quarter, according to a real estate information service, but home prices were still being dragged down by previously foreclosed properties entering the market.
During the second quarter, foreclosure homes in Orange County sold for 11.2% less than non-foreclosure homes, according to La Jolla-based DataQuick Information Systems. Statewide, foreclosure homes sold for 15.7% less than non-foreclosure homes.
Orange County real estate agents agree that foreclosures can generate bargains for buyers, even though lenders are starting to demand prices more in line with those of comparable non-foreclosure homes.
“They’re offering good programs to make houses more salable,” said Steve Stovall, president of Century 21 Neighborhood in Fountain Valley. “I know of one program that offers 3% down on a 30-year fixed mortgage with no mortgage insurance. So even if you have a higher price, that’s very attractive.”
While the lingering effect of foreclosures is hurting home sellers, Orange County is “doing better than the rest of Southern California, particularly the Inland Empire,” said DataQuick spokesman John Karevoll.
Foreclosures during the second quarter rose by 1.6% in Los Angeles County and fell by 1% in San Diego County. Foreclosures rose by a hefty 12.5% in San Bernardino County, where many first-time buyers paid hefty prices for starter homes in the late 1980s.
“A lot of the homes in Riverside and San Bernardino counties were bought with down payments of 3% to 5%,” said DataQuick Chief Executive Officer Donald L. Cohn. “Those properties don’t have to come down very much in value before the owner owes more than it’s worth, a typical foreclosure situation.”
Foreclosures in California hit a peak during the second quarter of 1993, when lending institutions initiated foreclosure proceedings on a total of 33,122 houses and condominiums. Foreclosures totaled 32,253 during the second quarter of this year, up 2.8% from the 31,380 reported during the second quarter of 1994.
DataQuick anticipates that, statewide, foreclosures will “stay at roughly the same level through the end of the year and then [begin] to decline,” Cohn said.
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Foreclosures Falling
Orange County home foreclosures dropped nearly 4% in the second quarter compared to the same period last year, running counter to much of Southern California. Recorded notices of default on houses and condos in the second quarter:
County 1994 1995 % Change Los Angeles 9,811 9,965 1.6 Orange 3,027 2,913 -3.8 San Diego 2,427 2,402 -1.0 Riverside 2,827 2,918 3.2 San Bernardino 3,156 3,551 12.5 Ventura 679 629 -7.3 So. Calif. total 21,927 22,379 2.1 All California 31,380 32,253 2.8
Source: DataQuick Information Systems
