Foreclosures ease in S.J. County, but ... | Recordnet.com

Foreclosures ease in S.J. County, but ... | Recordnet.com

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FORECLOSURES EASE IN S.J. COUNTY, BUT ...

DEFAULTS LIKELY WILL HAUNT HOUSING MARKET FOR YEARS


By Reed Fujii
July 14, 2011
Record Staff Writer
Foreclosure filings fell sharply in San Joaquin County in June, down 46 percent from a year ago. The decline dropped the county out of the top 10 nationally after months at or near the top in the rate of foreclosures. But experts say the downward trend only means more pain later.

June was the 19th month in a row that San Joaquin County foreclosure filings had shown a year-over-year decline, Realty-Trac Inc. is reporting today. The drop means the region, also known as the Stockton metropolitan area, fell to 11th among the nation's 200 largest metros after occupying the No. 2 spot in May.

Las Vegas, Riverside-San Bernardino and Stanislaus County, in that order, held the three highest rates of foreclosure filings in June.

The Irvine-based company reported that nationwide, more than 1.17 million U.S. properties were subject to a foreclosure filing - default notice, trustee auction or bank repossession - in the first six months of the year. That was down 25 percent from the previous six months and a 29 percent decrease from the first half of 2010.

But the drop in foreclosure filings should not be seen as a signal of positive economic trends, said James J. Saccacio, RealtyTrac's chief executive. Largely, it seems to be due to processing and procedural delays by lenders.

"We estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012 or perhaps even later," he said. "This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number."

Art Godi, principal of Art Godi Realtors in Stockton and a past president of the National Association of Realtors, said the San Joaquin housing market faces several challenges, and foreclosure and short-sale properties are just one.

Such distressed properties constitute roughly 60 percent of current residential listings and sales and contribute to continued low housing prices. Fewer foreclosures would bring the market into a more typical balance, with distressed property sales being the exception.

That may take a few more years, Godi suggested. But even if it happened tomorrow, the county's high unemployment rate - pegged at 16.2 percent in May - would remain a problem.

"If (housing) comes back into balance, I think we'll see an increase in prices," he said. "But increases in prices will be tempered by the job market."

When comparing states, Nevada held the nation's highest foreclosure rate in the first six months of the year, with 53,217 properties - or about one of 21 - receiving a filing in the period. That was a decrease of 17 percent from both the previous six months as well as from the first six months of 2010.

Arizona registered the nation's second-highest state foreclosure rate in the first half of 2010, with one in 36 receiving a foreclosure filing. California registered the nation's third-highest state foreclosure rate, with about one in 51 of its housing units receiving a foreclosure filing during the six-month period.

Contact reporter Reed Fujii at (209) 546-8253 or rfujii@recordnet.com.