Lack of Inventory Hampering California Sales
As homeowners have an array of foreclosure mitigation options to currently choose from like the Home Affordable Modification Program, the Home Affordable Refinance Program, and the Home Affordable Foreclosure Alternative Program, all of these various opportunities result in fewer housing units becoming available for sale.
According to ForeclosureRadar.com, California foreclosure activity continues to decline as defaulting homeowners are taking advantage of all of these federal programs. Notice of defaults fell approximately 60% in January compared to the prior month, while notice of trustee sales decreased 34% on a monthly basis.
In January, 5,445 foreclosure sales occurred in California, which is 463 less than December. This represents a 7.8% month-over-month change, ForeclosureRadar.com noted.
“What is unusual about the January totals is that in the past, foreclosure sales have increased in January after a slowdown in December,” a ForeclosureRadar.com spokesperson said in an email. “The expected January pick-up failed to materialize this year.”
One of the main reasons why there is a decrease in foreclosure sales in California is that inventory is low. Through January, REO inventory for California is 58,201, down from 92,635 a year ago.
Furthermore, housing units considered to be preforeclosure inventory also saw a large drop on an annual basis, down to 48,714 in January 2013 from 79,655 during the same time period last year.
“While the alphabet soup of Federal programs has successfully prolonged, or catapulted delinquent homeowners out of the foreclosure process, the unintended consequence is now an acute lack of available housing inventory for sale,” the spokesperson said. “Any sort of housing market recovery is dependent upon adequate inventory, which is now missing in much of California.”