Wednesday, October 18, 2006

Bay Area Foreclosure: 7 year high

Foreclosure activity in the Bay Area rose to its highest level in more than seven years as home sales slowed and prices began to slide.

The number of notices of default, jumped 89.2 percent in the nine Bay Area counties in the third quarter compared with the same period a year ago.

Both Rosen and Levy expect foreclosure activity to continue its upward march.

There were 3,795 notices of default sent to Bay Area homeowners in the third quarter, up from 2,006 a year earlier.

Homeowners were about five months behind on their mortgages when lenders issued the notices of default.

Karevoll said foreclosure activity peaked in the Bay Area in the first quarter of 1996 when there were 6,830 notices of default. "What we're seeing now is the market rebalance itself," he said. ".

The Bay Area trailed the statewide average in terms of the rise in default notices. Across California, the number of notices of default rose 111.8 percent in the third quarter to 26,705, from 12,606 during the same period a year ago.

Statewide, more than half of the homeowners who went into default in the third quarter had loans issued in 2005.

"In the Bay Area, foreclosure activity is always lower than rest of the state," Karevoll said. "The Bay Area has a higher housing cost than the rest of the state, so the people who buy in the Bay Area have more money and are less likely to go into default."

The higher prices also mean that the Bay Area has fewer entry-level home buyers than places like Sacramento, he said.

Solano County saw a 171.3 percent increase in notices of default in the quarter, the most of any Bay Area county. San Francisco had the second-biggest jump with a 109.9 percent gain, followed by Contra Costa with a 99.6 percent rise.


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