Slowdown in California Foreclosures Drove Up Home Prices

by on Foreclosure Crisis

The year-over-year slowdown in California foreclosures drove up home prices throughout the state in March and in the first quarter this year.

The median price for single-family homes in California climbed up to $255,000 in March, a jump of 14.3 percent from the $223,000 median in March last year. The March price marked the fifth straight month that the median sales price in California rose year-over-year after more than two years of price drops. It also marked a 2.4-percent jump from the $249,000 home price median in February.

In March, there were nearly 17,000 homes in California which became bank owned homes for sale. They accounted for 18.13 percent of the 93,173 foreclosures filed during the month. They also marked an increase of 34.64 percent from the 12,546 units repossessed by lenders in February. Buying foreclosed homes for sale at attractive prices in California is still possible despite the slowdown in foreclosure activity in March as a total of 46,445 units were taken back by banks in the first three months of this year.

The pace of California foreclosures in March and in the first three months of this year both declined compared to their 2009 counterparts, but the pace stepped up compared to the previous periods. In March, the foreclosure rate increased by 36 percent compared to the previous month of February while in the entire first quarter, the foreclosure rate rose by 4.7 percent compared to the previous quarter, which is the last quarter of 2009.

Total foreclosure filings in California in the first quarter increased to 216,263 and put the state fourth among U.S. states in a ranking of foreclosure rates. The filings accounted for 23.2 percent of the 932,234 foreclosures posted nationwide during the quarter. Florida posted the second highest number of filings, which reached 153,540, accounting for 16.5 percent of total filings in the country in the first quarter.

In March, California was second among states in foreclosure rate, but its rate of one foreclosure for every 144 homes was far better than the foreclosure rate of top-placer Nevada, which was one foreclosure filing for every 76 homes.

California realtors said that the rise in home prices not only reflected the slowdown in California foreclosures; it also reflected the resurgence in sales of higher-cost coastal homes. The sales median price in the San Francisco Bay Area increased by a whopping 31 percent to $380,000 in March from the median in March last year.