Reporters John Simerman and Barbara Hernandez analyzed Bay Area foreclosure hot spots in the East Bay and North Bay for a two day series:
SUNDAY: Foreclosure clusters are ravaging East Bay streets and neighborhoods, gouging property values as abandoned houses become targets for squatters, thieves and drug dealers.
MONDAY: Solano is among the counties hardest hit by the mortgage meltdown, with foreclosures affecting one in every 43 homes.
Before the lawns turn pale and the weeds flare up and the newspapers litter the driveways, the children know the score.
In southeast Antioch, where a swarm of East Bay foreclosures makes its thickest nest, the children on Catanzaro Way live among a grove of real estate signs that turn like autumn leaves, from "For Sale" to "Reduced Price" to bright "Auction" yellow.
The signs mark houses left vacant by owners with no equity or patience or much hope to mend their blistered credit. Ten vacant houses run along a single block, where two-story homes sold for as much as half a million dollars in 2005, but no one here wants to guess what they would fetch now.
Some are afraid to look. Local agents say home values in Antioch have slipped a solid 30 percent from their highs. Now, 1,200 homes in the city are listed for sale. Banks own a third of them. Last month, fewer than 40 sold.
One home on Catanzaro that sold at more than its $445,000 asking price in late 2005 sat for 10 months this year at $322,900, said listing agent Jim Mann. Nobody bit. It sold at auction last week for an as-yet undisclosed amount.
The driveways of some vacant houses on the street now serve as neighborhood parking lots.
"I'm kind of embarrassed to have my friends come over," said 15-year-old Angelica Berrera. "We used to come outside and have a good time. It used to be nice. Now it's ..."
"Empty," said her sister, Natalie.
"All these houses, no one watches them because nobody lives in them," added Clarissa Juarez, 13. Auction signs frame her driveway. Across the street stand two other foreclosures. Her house is surrounded by nobody.
"It's kind of quiet," she said. "Too quiet."
The street is among several across the East Bay where foreclosures have gathered in clusters, with as many as six bank-owned houses on a single block, according to a Times analysis of sale data from DataQuick.
From East Oakland to North Richmond to Discovery Bay, several newer developments, along with urban enclaves that got a jolt of renewal during the housing boom, now bow under the weight of abandoned and foreclosed homes.
Most, but not all, of these clusters crop up in lower-income areas, where studies have shown the subprime loan drive at its most rampant.
Much of the outcry over the mortgage crisis has centered on the damage to borrowers and financial markets. Only lately is attention turning to the burden on those left behind: sinking property values, the eyesore of boarded-up windows and doors, watchful neighbors replaced by drug dealers and squatters, safety fears, frayed neighborhoods.
A report released this month by the Center for Responsible Lending put a number on the "spillover" cost of the foreclosure crisis: $223 billion nationwide.
It ranked Alameda and Contra Costa among the 25 hardest-hit counties in the nation, with a combined $5 billion in lost value to nearby homes. Before it's over, the report says, Alameda, Contra Costa and Solano counties will see nearly 15,000 foreclosures, with an additional 740,000 homeowners feeling the bite.
The estimates are based on research showing a nearly 1 percent average decline in values within a few blocks of a foreclosure. In hotbeds, the drop multiplies.
It's "like a disease epidemic," said the center's CEO, Martin Eakes, who expects the ripple to be felt for two to three years. "The losses are extending to neighbors and entire communities. ... We've only begun to see the impact."
Among recent signs of trouble in the East Bay:
"It's a last act of defiance against the bank," said Jim Tucker, a code enforcement officer who patrols a large swath of southeast Antioch.
On his rounds one recent afternoon, Tucker pointed out the iron gates and outdoor light fixtures that the owner swiped before the bank took the house. Across the street was another foreclosure, with the telltale sun-baked yard.
At another, a two-story brown stucco house on Asilomar Drive, Tucker had recently boarded up the windows and doors. The occupants were dealing drugs from the house, he said.
Their garbage service was shut off, so they stacked bags of trash in the back. When he walked to the rear of the house, Tucker found one board ripped off, a sign that someone had returned.
"It's cat-and-mouse," he said.
With the market awash in houses, neighbors fear the badly kept ones will sit, boarded up, for years. Some banks have responded by cleaning up properties. But most "don't want to lose any more money than they already have," said Tucker, who tries to convince them that letting a house go south will cost more.
East Bay cities often attach liens on the house for cleanup and other costs, to be paid eventually by the next owner.
Code officials are getting more aggressive to ensure that property values, and tax revenues, don't dwindle further. In Antioch, for instance, officials no longer send gentle courtesy notices before citations and fines, said Denise Skaggs, head of code enforcement.
To owners about to lose their homes, it's not much of a threat, she said. Lawns still go untended. Junk cars fill driveways. Utilities lapse and the homes lose electricity and water. Some residents run generators or cop power from neighbors.
"I'm losing leverage with people. They say, 'Go ahead and put a lien on my property. I'm losing it anyway,'" she said. "Threats have increased. This last year you've seen the tightness, that edge. People are real quick to threaten us. We don't knock on doors anymore."
A Times analysis found that the top six hot spots for single-family home foreclosures in the East Bay, from January 2006 through September 2007, all were in Contra Costa.
Antioch led the way, with 25 foreclosures per 1,000 single-family homes. San Pablo, Pittsburg, Brentwood and Oakley followed. In Alameda County, Oakland tops the list.
The two Antioch ZIP codes -- 94531 and 93509 -- led all others in the number of foreclosures, followed by Pittsburg/Bay Point's 94565, Brentwood's 94513 and Oakland's 94605, at the base of Interstate 580 and Highway 13 in East Oakland.
There, residents talk about the door-knockers who came by a few years ago, offering loans to older owners. They point now to the homes of longtime neighbors who have quietly left.
"She was kind of private. Her husband had passed. She took a couple loans out. She told me on a Tuesday she was moving out on Thursday," Tyrice Ross said of a neighbor who had lived for 15 years on 75th Avenue, until spring.
"I look up one day, she said she needed help getting a U-Haul truck," Jane Gray said of her next-door neighbor.
On Weld Street in Oakland, Fannie Brown points to foreclosed and abandoned houses, one after the next, near her own.
"This whole block was full and flourishing," said Brown, who works for the Association of Community Organizations for Reform Now, or ACORN, a housing advocacy group.
"That green house back there, foreclosed. They started breaking into it. That building's been burnt. They went and took all the doors and windows. ... This house right here is up for sale. People squat in 'em."
A study in 2005, based on Chicago data, tied an increase in gang activity, drug dealing, prostitution, arson and rape to some vacant properties.
That study found that each abandoned house can cost municipal agencies hundreds or thousands of dollars in trash removal, utility tax losses and the demolition process, if needed.
Local agencies said they have yet to see a spike in crime in the East Bay. But some worry about the "broken window" theory -- that small signs of blight can draw criminals to a street like shoppers to a post-Thanksgiving sale.
"Part of safety is perception," said Antioch police Chief Jim Hyde. "You're going to see ... not only the weeds growing, abandoned vehicles being parked on the location, but also loitering and the possibility of people breaking in, usually to the back of the residence, to be squatters."
The numbers in Antioch tell a brutal tale: In the first six months of 2006, 35 homes in the city went through foreclosure. In the six months ended Sept. 30, foreclosures took 472 homes. The pace in the city is now more than 90 foreclosures a month.
Some of that, agents say, stems from aggressive builders offering huge perks -- including two years of mortgage payments in some cases -- to get buyers into homes. When the money runs out, often so does the ability of owners to make the payments, they say.
"This is the worst I've seen in 30 years," said Mann. "This foreclosure process points out the weak spots. We've got certain areas of the market that were weak before, and it got real hot when the market was really booming, and everyone forgot where the weak spots were."
The effect on property tax revenues will not be known until after the new year, when county officials tally the damage, mostly from properties getting assessed downward in and around newer developments. County officials say they expect lower-than-normal tax revenue increases.
Alameda County, which saw an 8 percent increase in property tax revenue this year, is expecting that to drop to about 5 percent, said chief deputy assessor Russ Hall. Contra Costa County Assessor Gus Kramer said he expects a similar slide from the 8.9 increase in the tax roll last year.
Many foreclosures, Hall noted, are to longtime homeowners who refinanced; despite the pain for them, the assessments on their former houses will go up with a sale.
Cities with a higher concentration of new developments will feel the pinch more. Last year, for instance, Brentwood saw a 29 percent increase in property tax revenue. This year, it was 13 percent. Next year could be dead flat, said Pamela Ehler, the city's finance director.
The money is split among the city, schools, fire service, the community college, the county and several other tax districts.
In tandem with a $10 billion state budget shortfall, the slowdown is bound to leave a mark in foreclosure hotbeds, said Kramer.
"It'll be more severe in Antioch, Oakley and Brentwood. This affects them directly. There's going to be some real serious belt-tightening by local government," he said.
"Concord, Walnut Creek, Danville are going to do fine. San Ramon's going to be OK ... Richmond and San Pablo are getting spanked and put to bed without their dinner."
In North Richmond, an anti-blight team funded by Richmond and Contra Costa County is trying to keep up with an onslaught of abandoned and foreclosed homes.
The long-beleaguered community got a big boost from the housing boom, as investors bought up land and renovated or rebuilt. Some got caught in the downturn and walked away.
Builders spawned new gated developments with homes selling for $600,000. Those same homes now are offered in the $400,000 range.
At least a few homes and apartment houses on every North Richmond street sit vacant, either foreclosed or abandoned. The homeless move from one to the next, officials say. Some of the houses serve as de facto trash dumps, others toilets.
"A vacant house is a great place if you're homeless and a drug addict and it's wintertime," said Maria Benjamin, program director for Community Housing and Development Corp. of North Richmond. "It's getting cold outside. They're fire hazards.
"We were celebrating, thinking it was changing. Now, why move into a neighborhood like this when you can move someplace else with so many houses (on the market)?"
Contra Costa fire Marshal Richard Carpenter said the agency has problems with abandoned homes and expects more as the foreclosure crisis drags on.
"If a person is intent, they're just going to go to the foreclosure section of the newspaper: 'Yup, that home's available,'" said Carpenter. "I'm sure we're going to see more of the clandestine drug labs get in there."
In some areas, authorities have started using thicker, more-secure boards attached to the house frame to keep squatters from ripping them out.
"It's a blight issue, and you're creating a place for people addicted to drugs to go in. They will just throw stuff out into the yard. That's how we find out about them. There's a dishwasher and trash all over the front of the yard," said Sgt. Darren Monahan, a Richmond code enforcement officer.
"I ran across one person, he was going to lose his house but he still kept coming back to the property to take care of it because he didn't want to affect his neighbors. He wanted to keep it clean," Monahan said. "That's pretty rare."
Authorities can clean up the outside of a home but have limited powers on the inside. With due notice they can demolish a home if it presents a hazard. Sometimes it takes months to figure out who actually owns it, said county building inspector Vincent Caballero.
"You see some homes where you've just got human feces in there, just really gross. All the copper's gone. It's trashed," said Jose Avila, a county environmental health officer who works in North Richmond.
As financial analysts plumb for the bottom of the swoon, local housing advocates say they can keep searching.
A deluge of discounted houses threatens a second, bigger wave of foreclosures, advocates say, as those prices make it harder for neighboring homeowners to refinance.
"You think about yourself being the next person," said Patience White, a nurse who lives with her family on Catanzaro Way. "It's sad when you're driving in, looking around. Nobody is watching out for you. Now I just rush in my house."
Reach John Simerman at 925-943-8072 or firstname.lastname@example.org.
To view an online map of foreclosures neighborhood-by-neighborhood, go to: http://www.contracostatimes.com/search/ci_7342417