Worse Foreclosure Days Ahead
In the first quarter of 2008, San Fernando Valley foreclosures skyrocketed to 201% in comparison to the previous year sending warning shivers that worse foreclosure days are ahead. Home prices took another pounding.
During the month of April there were 608 foreclosures as against 2002 in April of the previous year. There were 511 foreclosures in March. This is according to the Economic Research Centre of San Fernando Valley.
Foreclosures are galloping forward to break its own record of 1,854 made during the third quarter of 1996. That was the most recent time when the housing sector was in the doldrums according to Daniel Blake of California State University in Northridge. The signs point to the worsening record-breaking foreclosures.
With a surfeit in house numbers in the market the average price for a single-family unit fell to $505,000 marking 21% loss. However there is a small ray of hope – it is up by $5,000 from last month.
In April 2007 there were 663 default notices. But in this April of 2008 it shot up to 1,560 according to Andrew LaPage of DataQuick Information Systems. In April this year the sale figures were 964 units (new, old as well as condos). It is the lowest since DataQuick started tracking from 1988. From March this year there was a slight increase – the third running month. It was first month-to-month gain (March –April) from 2004. The findings from two other tracking sources show the same trend of increase in monthly sales gains. Perhaps the corner is being turned with more deals being picked up. Lenders having got their house in comparative order are not shutting out borrowers anymore.
As compared to Los Angeles, the valley fared comparatively better. In the county the sales fell by 31% from the previous year. There were 5,016 sale deals according to DataQuick. In all the six counties sales dropped by 19% with 15,615 deals. In the last 8 months this is the highest figure but the lowest ever recorded for April.
But there is a reluctance to be too optimistic. Statistics can be read in many ways. The year-over-year count is nothing to crow about. The financial markets are in turmoil with maxi and mini loans setting no parameters. It needs watching over several months before commenting. Perhaps the various preventive efforts are at last beginning to show results. Or perhaps it is just the River of Economics following its own predestined course.
