Washington, April 22: California, Florida, Nevada and Arizona registered the highest rates of foreclosures in the U.S. in the first quarter of 2009 as the unrelenting recession led to increase in unemployment and fall in property prices.
A report by RealtyTrac Inc, an online marketer of foreclosed properties, revealed that Las Vegas, where 4.5 percent of households got a default notice, auction notice or seizure notice by the lender, registered the highest rate of foreclosure filings.
With 4.2 percent of households in delinquency, Merced, California ranked second. Cape Coral-Fort Myers, Florida; Stockton, California; and Riverside-San Bernardino-Ontario, California completed the top five. Out of the 25 cities with highest foreclosure rates, 13 were in California, revealed the report.
Referring to the concentration of foreclosures in 4 states, James J. Saccacio, chief executive officer of RealtyTrac, said, “The metro areas with the highest levels of foreclosure activity in the first quarter of 2009 paint a picture of concentrated problems in a relatively small number of hard-hit areas."
With home prices falling every month since January 2007 on a year-over-year basis, jobless rate increasing to 8.5 percent in March, and household net worth declining by $11.2 trillion last year, the scenario is not looking good in the nation.
The threat of unemployment looming large over the heads has meant that borrowers with safe and sound incomes and good credit worthiness have avoided purchases. Economist Ed Leamer, director of the Anderson Forecast at the University of California, Los Angeles, noted, “Housing has a chicken-and-egg problem where banks won’t give loans when prices are falling, and you can’t stop prices from falling without buyers getting a loan.”
Nationwide, foreclosure requests spiked to create a new record. In all, 803,489 filings were made in the first quarter of 2009, the highest quarterly filings since RealtyTrac started reporting in January 2005. Of these, 60 percent of the foreclosure filings came from California, Florida, Arizona, Nevada and Illinois.