Number of home foreclosures declines 15%

Realtors concerned that banks are keeping large number of foreclosed homes off the market.

June 30, 2010|By Bill Kisliuk,

Home foreclosures in the region dipped slightly in May, with fewer homeowners struggling to make their payments, experts said.

The number of default notices, sales at auction and bank repossessions in Burbank, Glendale, La Cañada Flintridge and La Crescenta fell 2% in May from the month prior, from 377 to 369, according to the real estate tracking firm RealtyTrac.

Compared with May of last year, the number of foreclosures in the area declined by 15%.

Paul Habibi, a professor of real estate finance at the UCLA Anderson School of Management, said he expects to see a "flat housing environment" for the remainder of the year.

With the job market projected to pick up and interest rates remaining low, buyers might still be encouraged and perhaps nudge home prices upward, he said, although the $8,000-federal tax credit for homebuyers ended Wednesday.


Sarevio Ficocelli, sales manager at Century 21 Paul & Associates in Burbank, said real estate agents are concerned the large supply of foreclosed homes banks are being kept off the market.

"In Glendale, Burbank and La Cañada, there are not a lot of foreclosures yet," Ficocelli said. "Banks are not releasing them."

Ficocelli also said Realtors are frustrated by the difficulties in getting quick bank approval of so-called short sales, when buyers offer the bank less money for a home than the mortgage abandoned by the previous owner.

Others see the logic in banks holding back distressed inventory. This week, RealtyTrac released figures that showed foreclosed homes nationwide sold for 27% less than homes sold through normal channels in the first quarter of 2010.

"As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration," RealtyTrac chief executive James Saccacio said in a statement.

La Cañada Flintridge had the largest decrease in local foreclosures rates — 27%, from 22 homes in April to 16 in May, according to the report.

Foreclosures in La Crescenta decreased 14%, from 43 homes in April to 37 in May.

Meanwhile, Glendale saw a 4 % increase in the number of homes going into foreclosure, from 180 in April to 188 in May.

Burbank saw a 3% decrease, from 132 homes to 128.

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