The decline in foreclosures in California has bottomed out, and a shift to a buyer's market in the state could lead to rising mortgage defaults, according to ForeclosureS.com, a distressed property investment advisory firm based in Fair Oaks, Calif.Foreclosures are now below "historic baselines" in some markets, and the default rate "has nowhere to go but up," the firm said. "According to Trendgraphix Inc., the Sacramento metro area saw 2,318 price reductions in May of this year," said Alexis McGee, president of ForeclosureS.com. "In July, we saw 4,100. August, at midmonth, was on track for 4,500. That's a cooling market." Ms. McGee added, however, that this does not suggest the existence of a so-called price bubble. "Contrary to some claims in the media that the sky is falling, we see a plateau forming, with modest price corrections in overheated markets," she said. ForeclosureS.com can be found on the Web at http://www.foreclosures.com.

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