L.A. Times: Mortgage Default Notices up 45% for Los Angeles County
Los Angeles Times bubblewatcher David Streitfeld in this August 3 story reports on rising mortgage default rates in California.
For California as a whole, notices of mortgage default are 20,752, up 67% in Q2 YOY from 2005, according to DataQuick. Now for the understatement of the year: "If it continues long enough it could impact home values."
The article notes that few homes actually end up in foreclosure, because homeowners sell before the bank can seize the property. Well well, we shall see if that trueism holds up in this particular downturn. The number of actual foreclosures in the state is up to 1,901, up 215%. Hmm.
The least foreclosure activity that occurred during this cycle was Q3 2004, with 12,145 default notices. The most was during Q1 1996 with 59,897 default notices.
For Los Angeles County, default notices are 4,586, up 45% Q2 YOY.
One Pimco analyst quoted in the article takes a dig at "housing bears" (who, me?!?) saying the default notice rate, by historical standards, is still "insanely low". Did he use the word "insane" to describe the levels of housing prices that we've reached? On a scale of 1 to 10, he rates the current default climate a 1.
Should we hold a contest here to see how fast we are going to surpass that statewide Q1 1996 number? From 20,752 to 59,897 shouldn't be too much of a chasm.
posted by bearmaster at 10:15 AM
4 Comments:
I'm working on the July zip code charts. I will do my best to get them up Friday night, Saturday night the latest.
By the way, if you are a wanna-be homeowner I would not be in a hurry to leap on a foreclosure. Even though the holders of most foreclosed properties might roll back asking prices maybe a year, 18 months, they're still asking waaaaayyyy too much for them. Well, properties were overvalued 18 months ago. They were probably overvalued several years ago. This downturn is still in its very early stages, and trying to find a "bargain" now that's marked maybe 20% off of peak asking is like catching a falling knife.
Right, ghetto_life, 1996 was the early stages of the upswing. So when foreclosures have maxed out, that could be signalling that the market bottom has passed. (Foreclosures being somewhat of a lagging indicator.) Of course the trick is in knowing if foreclosures have maxed.
We're seeing the tip of the iceberg. 2007 will be much worse. Keep blogging bearmaster.
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