California, Florida lead metros in home foreclosures
An analysis of foreclosure activity in the nation's 100 largest metropolitan areas during the three months ended Sept. 30 shows seven cities in California and five each in Florida and Ohio were among the top 25 metro areas with the highest foreclosure rates, according to a study released Wednesday by RealtyTrac.
The company calculates its foreclosure rates by comparing the number of households in a metro area with the number of foreclosure filings, which include notices of default, auction sale notices or bank repossessions.
Stockton, Calif., about 83 miles east of San Francisco, had the highest foreclosure rate in the third quarter among the top 100 metro areas, with one foreclosure filing for every 31 households, RealtyTrac says.
Detroit was second, with one foreclosure filing for every 33 households. The Riverside-San Bernardino metro area, about 60 miles east of Los Angeles, was third, with one filing for every 43 households.
Riverside-San Bernardino also accounted for the most foreclosure filings in the U.S. during the quarter, RealtyTrac said.
The housing market slump has made it harder for financially strapped home buyers to sell their homes and avoid missing payments or losing their homes in foreclosure. Increasingly, many borrowers who took out adjustable-rate mortgages and other loans that adjust to higher monthly payments after an initial period are also finding they can't afford their payments.
Once-booming areas, such as California's Central Valley, where Stockton is located, and the neighboring counties that are home to Riverside and San Bernardino, are also mired now with a glut of new and resale homes.
"What happens there is you have your basic economic imbalance between supply and demand," said Rick Sharga, vice president of marketing for RealtyTrac. "It exacerbates the problem for people who are on the verge of default."
Stockton had 7,116 foreclosure filings on 4,409 properties during the quarter, an increase of more than 465% from the same quarter a year ago, the company said.
The Detroit metro area, which includes Livonia and Dearborn, reported 25,708 filings on 16,079 homes, up more than 93% from the same quarter last year. It had the third-highest number of filings during the quarter.
Riverside-San Bernardino had 31,661 filings on 20,664 properties, a jump of more than 267% from the year-ago quarter.
Fort Lauderdale, was ranked fourth, followed by the Las Vegas-Paradise metro area.
The California metro areas of Sacramento, Bakersfield and Oakland were also among the top 10 metro areas with the highest foreclosure rates, garnering the sixth, ninth and 10th spots, respectively.
A metro area in Ohio composed of Cleveland, Lorain, Elyria and Mentor was ranked seventh. Miami was ranked eighth.
Los Angeles had the second-highest number of foreclosure filings during the quarter with 29,501 on 18,043 homes. The city's foreclosure rate was one filing for every 113 households, or 26th overall.
Some metro areas, including Baton Rouge, McCallen-Edinburg-Pharr, Texas, and Greenville, S.C., saw foreclosure filings drop during the quarter.
Borrowers in Detroit and other metro areas in the Midwest that have been hard-hit by job losses generally were receiving late-stage foreclosure filings, such as notices of auction or bank repossession, Sharga said.
"That just speaks to the underlying weakness in those areas," he said.
Dave Webb, co-owner of Hudson & Marshall, a foreclosure auction firm based in Dallas, said most of the properties being auctioned by his firm in inland areas of California are investment properties that ended up being repossessed by lenders after the market tanked.
"What I'm selling this week 700 homes in the Stockton-Oakland area these properties were probably foreclosed a good year-and-a-half ago," Webb said.
"You'll see when we come back late next year," Webb said. "It will be mostly owner-occupied homes."