MDA DataQuick Information Systems reported that for the fourth quarter of 2010 the number of California’s completed foreclosures dropped sharply, both from last month’s numbers and from figures of 2009.
Even better news is that the number of NODs (Notice of Default), the first step in the foreclosure proceedings, declined sharply also. The number of NODs was down 16.2% from the third quarter and down 17.5% from last year’s fourth quarter. At 69,799 filings last quarter it is not time to party yet, but it is a sign of progress. That number is about 1/2 of the record high set in the first quarter of 2009.
How much of the improvement is due to the investigations by the feds and by the state, loan modifications, and the lenders cleaning up their own back yards, is unknown. But, the general consensus is that the risky loans from the 2006 bubble are behind us so the housing market will continue to improve right along with the general economy.
Our take? This appears to coincide with the movement we see locally. However, we do have a large inventory of REO (Lender owned) homes to deal with. This inventory is important because it is a major price driver. While we do have areas with a high density of REO properties, that inventory is decreasing faster than it is added to.
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