Foreclosures in the Los Angeles area have dropped when compared to last year, which is a trend that is consistent with both the state and the nation. Fortunately, both foreclosure inventory and completed foreclosures are experiencing a downward trend locally, statewide and throughout the country.
Understanding Foreclosure Terms
The term foreclosure inventory refers to the number of homes that are at some stage of the foreclosure process, while completed foreclosures are the total number of homes that have been lost to foreclosure. Since the start of the financial crisis in September 2008, there has been a total of about 6.2 million completed foreclosures throughout the country. Since the peak of homeownership in the second quarter of 2004, approximately 8.3 million homes have been lost to foreclosure.
Los Angeles Foreclosures Fall
According to recent data, foreclosures in Los Angeles fell by 24.5 percent in April when compared to the same time last year. Overall, the foreclosure rate in the Los Angeles-Long Beach-Glendale area was just 0.5 percent, with the number of foreclosures falling to 3,956. The number of homes in serious delinquency, which is defined as being 90 days or more past due, also fell in the month of April. In fact, only 1.7 percent of homes were in this category, representing a 20.6 percent drop when comparing data from this year to last year.
Statewide Foreclosures Drop
Just as the Los Angeles-Long Beach-Glendale area experienced a drop in foreclosure rates, so has the state overall. When compared to last April, foreclosures fell 23.1 percent to just 0.4 percent. This represents 22,889 homes for the year. The number of homes in serious delinquency also fell by 18.9 percent to 1.5 percent.
National Foreclosures Drop
Nationwide, foreclosures inventory fell by 23.4 percent from the previous year as the number of completed foreclosures fell 15.8 percent. With the number of completed foreclosures throughout the country being 37,000 for the month, the figure represents a 68.9 percent decrease from the peak that was reached in September 2010. At this time, there were 117,813 completed foreclosures throughout the country.
As of April of this year, the national foreclosure inventory is at 1.1 percent, representing 406,000 homes. In April 2015, the national foreclosure inventory was at 1.4 percent, representing 530,000 homes. The foreclosure inventory rate for April 2016 is the lowest it has been for any month since September 2007. The number of mortgages in serious delinquency also fell by 21.6 percent with only 3 percent falling into this category. This represents about 1.1 million mortgages throughout the country, making the April 2016 delinquency rate the lowest it has been since October 2007.
While a variety of reasons may be attributed to the drop in foreclosure rates, it can mostly be linked to a recovery in home prices and an improved labor market. These are all good reasons to consider purchasing a home in Southern California. To learn more about Los Angeles real estate opportunities, contact our team of luxury real estate experts. We specialize in high-end homes in Southern California’s most exclusive communities and neighborhoods.
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(all data current as of 5/25/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.