Friday, September 01, 2006

Placer leads in foreclosure increase

When economists discuss Placer County they use many superlatives. The area stretching along highway 80 from Roseville to Truckee (and over to Lincoln) has been credited as being one of the fastest growing counties in the state and nation for the last five years. Job growth has exploded; commercial construction leads the state as retailers compete for space in this upscale county. Median family income levels are some of the highest in the state, unemployment is the lowest and real estate values have doubled in just the last four years.

Now Placer County has received another noticeable record. DataQuick Information System reported that the percentage of year-over-year mortgage default notices was the second highest in the state. According to the report, Placer County experienced a 126 percent jump in the number of recorded “Default Noticed” filed. A default notice is the first legal step in the foreclosure process that a lender takes when a borrower does not make their scheduled house payment. Neighboring Sutter County placed first in the percentage increase with a 229 percent increase in yearly default notices.

Statewide, the number of default notices issued for the April through June quarter was 20,752 up 67 percent form the second quarter of last year.

Now before I get a number of calls from investor looking for deals on foreclosures, I should point out that only 7 percent of all default notices will lead to a foreclosure. Percentage increases are also misleading. The total number of default notices issued for the entire county during the second quarter was 276 compared to only 122 during the second quarter of 2005. It was a big percentage increase but not large in number when considering that 40,000 new homes have been built in the county in just the last 5 years.

Actual foreclosure levels remain below the state’s average for our capital region. Employment continues to grow, unemployment in the region is below the state and national levels and median family income is up from last year. While the real estate market isn’t as robust as it has been, thousands of homes close escrow each month. We have lots to be thankful for this Labor Day!

Enjoy your weekend holiday. Vicki is off for a two-day show in Grayeagle (north of Truckee) and I will showing homes on Saturday and taking a loan application on Sunday. If you are driving someplace be careful.


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