Tax Credit Benefited Several California Areas

by on Foreclosures

The tax credit program of the U.S. federal government might have been more effective than initially believed. At least for some California areas, as foreclosure activities in several metros of the state recorded considerable declines last year compared with 2009 levels.

San Jose foreclosures for sale and foreclosed property numbers in the rest of California remained high last year, but total numbers represented decreases from 2009 figures, particularly in areas like San Bernardino and San Diego. Nationwide, metro regions that were hit hardest by the housing market crisis during the first two years of the foreclosure onslaught mostly recorded decreases in total foreclosure-related filings.

Despite the declines, bank foreclosure listings in California remained some of the highest in the whole country. In San Diego, foreclosure-related activities dropped by 17% last year compared with the previous period. The drop was the third biggest decrease in 2010 among the 20 biggest metropolitan areas in the U.S. San Bernardino, on the other hand, recorded a 20% decrease, putting the Riverside area in second place nationwide in terms of foreclosure decreases.

Although a number of reasons has been cited for decreases in these areas, some analysts believe that the tax credit also did its part in lowering the number of foreclosures in the metros. Analysts, however, have warned that Americans should not be misled by the figures since they do not mean that the foreclosure problem is over and done with. They reminded the public that despite the drop in foreclosure activities in certain areas, total filings remained at historic highs in most U.S. markets.

In addition, analysts are predicting that bank foreclosures list and foreclosure filings will likely increase again this year as cases that were put on hold during the fourth quarter of last year following the implementation of the moratorium will be restarted in 2011. Furthermore, they stated that most of those that recorded decreases are areas that were hit first by the initial wave of foreclosures and it only makes sense that they will also experience the decline first.

For 2011, with the tax credit already a thing of the past, most analysts predict that the foreclosure level will be much the same as the previous period. However, they did claim that a projected rise in short sales will help prevent foreclosures from getting out of control.

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