Although the area’s 424 foreclosures and default notifications are much higher than they were in June 2008, when 274 occurred, the latest local trends show that home values are significantly more stable than elsewhere in the region, experts and real estate agents said.
As prices have not experienced steep drops, compared to other areas, local homeowners have likely had more flexibility in negotiating with banks, said Daren Blomquist, a spokesman for RealtyTrac.
“Usually the markets with the lower foreclosure rates are standing up a little bit better in this environment that we’re in and are holding their values better so that homeowners who are in distress have some more options to avoid foreclosures,” Blomquist said.
Home prices are not deteriorating locally as much as they have in other parts of Los Angeles and Orange counties, where massive housing developments were built to fill a demand that was fueled by risky lending practices, said Dan Soderstrom, a real estate agent for Dilbeck Realtors in Burbank.
Banks have become more strict when issuing loans, but since the area has fewer new construction projects than other Southern California communities, demand for homes has remained strong and prevented prices from falling dramatically, Soderstrom said.
“When the wheels came off the market a little bit, that wasn’t as drastic [locally],” he said.
Glendale and Burbank’s foreclosure rates remain higher than the national average of one in every 144 homes, according to RealtyTrac.
And Realtors have taken notice of the large jump in foreclosed homes as they fill newspaper ads for auctions and deep discounts.
But the comparatively low rate of foreclosures has likely helped keep regional values from plummeting, which has, in turn, kept the area a destination for home shoppers, said Kendyl Young, a private real estate agent.
“If we have a lower foreclosure rate, it means our property values are maintaining and I think that does make it more desirable,” Young said.
When there have been foreclosures, they do have a negative impact on neighborhoods because the reduced prices of those homes impact the values of nearby properties, Soderstrom said.
Because the area has so far been spared from the full force of the foreclosure rates seen in other parts of the county, the effect on local communities has been subdued, despite the falling home prices, the agents said.
