By Alejandro Lazo, Los Angeles TimesDecember 15, 2011 

Banks in November scheduled more than 26,000 homes to be sold at California foreclosure auctions, a 63% increase from October and a sign that a surge in discounted, bank-owned properties is on track to hit the market next year.

The uptick in scheduled auctions follows an increase last summer in homes entering the foreclosure process by receiving default notices and was largely driven by Bank of America. It appears that many of those homes are now quickly working their way through the process, said Daren Blomquist, a spokesman for RealtyTrac of Irvine, a data tracker that published the November data.

The increase played out nationally, hitting a nine-month high, even as overall foreclosure notices declined last month. Among the states, California had the biggest month-over-month increase in scheduled auctions, followed by Washington, 56%; Ohio, 53%; New Jersey, 44%; and New York, 38%.

“November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as [foreclosures] or short sales sometime early next year,” said James Saccacio, co-founder and chief executive of RealtyTrac.

Nationally, overall foreclosure filings on U.S. properties — default notices, scheduled auctions and bank repossessions — totaled 224,394 in November, down 3% from October and off 14% from November 2010. About 1 in 579 homes received a foreclosure filing last month, by RealtyTrac’s tally.

Celia Chen, a housing economist with Moody’s Analytics, said she expected the number of foreclosures on banks’ books to rise next year and for the number of discounted foreclosures on the market to remain elevated. That will continue to put pressure on home prices.

“The pace of sales will remain very slow, so the share of distressed sales is going to rise most likely through the middle of next year, and this will cause home prices to fall,” Chen said. “Job growth is still weak, and then it is still a bit difficult to get those low rates. Lenders, in general, are still being pretty careful about who they write a mortgage for.”

The West’s Foreclosure Belt continued to be the hardest hit region in the nation. Nevada posted the highest foreclosure rate in the nation for the 59th month in a row, despite a decline in foreclosure activity because of a new law cracking down on those doing the foreclosing. California had the second-highest rate and Arizona the third in November.

California cities accounted for nine of the 10 metro areas with the highest foreclosure rates. Las Vegas was the only city outside of California in the top 10, coming in at No. 6. Stockton posted the nation’s highest foreclosure rate for the second month in a row, followed by Modesto and Fresno.

In California, total foreclosure activity was up 15% from October and up 11% from November 2010. The number of homes entering foreclosure continued at an elevated level last month, down just 1% from October and up 12% from November 2010. Notices of trustee sales, or scheduled auctions, jumped 63% month over month and 14% over November 2010. Bank repossessions declined 15% from the previous month and were up 1% from the same month last year.

The uptick in California filings was driven by the auction notices. When such a notice is filed at a county recorder’s office, a home can be sold within 21 days.

alejandro.lazo@latimes.com

Copyright © 2011, Los Angeles Times

By Alejandro Lazo, Los Angeles TimesNovember 30, 2011

Home prices in the nation’s largest cities fell in September, a widely followed index showed, underscoring the unrelenting weakness in the housing market that could last well into next year.

The Standard & Poor’s/Case-Shiller index of 20 American cities, a key measure that is closely watched by economists, declined 0.6% from August to September and 3.6% from September 2010. The drop ended five months of month-over-month gains.

Analysts had expected a decline in prices given the end of the busy home-shopping season. Nevertheless, the reversal of home-price gains casts a cloud over recent data that had shown some improvement in housing, such as increased builder confidence and an uptick in building starts. With the fresh home-price data released Tuesday, several analysts noted that a recovery remains out of sight this year.

“Any chance for a sustained recovery will probably need a stronger economy,” said David M. Blitzer, chairman of the S&P index committee.

Home prices, as measured by the 20-city index, are 2% above their bottom hit in April 2009 during the depths of the financial crisis. Prices briefly dipped below that threshold in March but began gaining ground again as the spring and summer selling seasons pushed prices up.

New foreclosure actions and weak demand probably will drive prices down an additional 5% to 10%, and perhaps more, if the economy slips into a double-dip recession, economists Patrick Newport and Michelle Valverde wrote in a research note Tuesday. The two, who track the U.S. economy for consulting firm IHS Global Insight, said the large number of people who remain behind on their mortgages and the high percentage of American homeowners who owe more on their properties than they are worth will also be a major drag on housing for the foreseeable future.

“Add to this the current high unemployment and underemployment rates, one gets a recipe for further price declines,” the economists wrote. “Should the economy slip into a recession … the unemployment rate will climb, driving foreclosures up and leading to an even larger drop in home prices.”

Even if prices begin to show some strength next year, they will probably continue to muddle along as foreclosures continue to cycle through the market, said Paul Diggle, property economist for Capital Economics.

“Even when prices do reach their trough, which could be next year, a continued influx of foreclosed and vacant properties onto the market will prevent the sharp bounce back that valuations might suggest is due,” he wrote in a note.

In a speech Tuesday at the Federal Reserve Bank of San Francisco, Federal Reserve Vice Chair Janet L. Yellen called for more housing stimulus.

“A sharp downturn in housing was at the core of the previous recession, and this sector continues to weigh on the recovery,” she said. “I see a strong case for additional policies to foster more rapid recovery in the housing sector.”

All of the California cities in the index posted price declines from August. Los Angeles and San Diego were down 0.8%, and San Francisco fell 1.5%.

Despite the declines, home prices in California cities measured by the index are comparatively healthy despite the state’s high unemployment rate. The markets tracked by the index are close to key job centers such as Hollywood and Silicon Valley and are also near the ocean, where overbuilding was relatively restrained.

The index does not track prices in California’s Central Valley or the Inland Empire, where housing is still weak and the foreclosure rates of many cities are among the nation’s highest.

Three U.S. cities posted new crisis lows in September, according to the Case-Shiller index. Both Atlanta and Phoenix joined Las Vegas in plumbing fresh depths. While Phoenix home prices are almost back to their January 2000 levels, those in Atlanta and Las Vegas have fallen below that benchmark.

A separate index by S&P/Case-Shiller measuring national home prices ticked up 0.1% from the second quarter, putting home prices at the same level they were at in the third quarter of 2003. The national index posted a year-over-year decline of 3.9%, which was better than the 5.8% drop in the second quarter.

The news that home prices had renewed their decline came as CoreLogic, a Santa Ana research firm that tracks the mortgage market, reported that more than 1 in 5 American home mortgages were underwater.

An estimated 10.7-million households, or 22.1% of all homes with mortgages, had more debt on the properties than they were worth in the third quarter, according to CoreLogic. This is a slight decline from the 10.9 million properties that were underwater in the second quarter.

“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” CoreLogic Chief Economist Mark Fleming said. “The nearly $700-billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”

Nevada led all states with 58% of mortgaged homes underwater, followed by Arizona, 47%; Florida, 44%; Michigan, 35%; and Georgia, 30%. This was the first quarter that Georgia made the top five, ousting California, which had been among the top spots since CoreLogic began tracking the data in 2009.

In the Los Angeles metropolitan area, 353,427 homes, or 23% of all mortgaged properties, were in negative equity at the end of the third quarter, a decline from 356,677. The number of homes with negative equity can decline when foreclosures increase because the repossession process extinguishes underwater loans.

alejandro.lazo@latimes.com

Copyright © 2011, Los Angeles Times

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Posted April 8, 2010