Foreclosures and Distressed Sales Increase
Foreclosures across the nation may have reached their lowest level since November (as well as the third lowest notch in 7 years), but that doesn’t mean it’s sunshine and rainbows in Cali.
Despite a falling foreclosure rate across the U.S., many California homeowners in low-priced homes are trapped upside down even as the market continues to recover.
Take Orange County for example. Even though home values rose 1% in February, distressed sales still made up 8% of all home sales. The number of distressed sales demonstrates that not all homeowners are able to refinance…even with increased equity.
Even this far into the recovery, overall home values continue to rebound while often the lowest-priced homes are left behind—stuck in negative equity. This is thanks in part to the fact that higher negative equity rates have become the new norm.
And while California foreclosures have improved slightly after posting a 43% annual increase (and 22-month high) for 2014, even with the improvement metros like San Diego saw an 8% YoY increase in foreclosures during January 2015 and Los Angeles posted a whopping 34% YoY foreclosure gain during the same time frame.