Foreclosure activity declined throughout the Bay Area in June, although defaults for home loans inched up in some areas, according to a report released Thursday.
The number of homes that lenders repossessed through loan foreclosures in June fell from May by 23.4 percent in Alameda County, 13.6 percent in Santa Clara County, 12.5 percent in San Mateo County, 10.3 percent in Contra Costa County and 10.4 percent in California. The figures were part of a report produced by Discovery Bay-based ForeclosureRadar, which tracks the housing market.
Notices of default, which are filed when a loan becomes seriously delinquent, rose in some areas but declined in others. Defaults rose from May by 8.6 percent in Santa Clara County, 7.4 percent in Alameda County and 3.9 percent in Contra Costa County. Default notices fell 8.3 percent in San Mateo County and declined 0.9 percent statewide.
The increase in defaults in some areas was probably a one-month fluctuation, according to ForeclosureRadar.
"The macro trend, which began in September 2008, is for lower and lower foreclosure activity," said Sean O'Toole, founder and CEO of ForeclosureRadar.
Yet the decline in foreclosures doesn't necessarily point to a healthy housing market. Residential realty continues to be challenged by homes whose mortgage loan balances exceed the value of the house. Many homeowners are not able to sell their houses because they wouldn't be able to pay off the loan balance
"With 25 percent of homeowners in houses that are underwater on the mortgage and hundreds of thousands of Californians sitting in their house and not making a payment, it's hard to call that a healthy market," O'Toole said.
Over a one-year period, default notices and final foreclosures are down sharply. The largest decline in default notices came in San Mateo County, which had a 22.1 percent decrease in defaults. The greatest regional decline in foreclosures came in Santa Clara County, down 73.9 percent.
With fewer bank-owned homes up for sale, the inventory of available-for-sale homes has shriveled.
"Our available inventory is dramatically down in Santa Clara County," said David Walsh, managing broker with a San Jose of realty brokerage Alain Pinel. "This is the lowest available inventory in 10 years."
Inventory in Santa Clara County is down 59 percent from a year ago, to 1,384 homes, Walsh said.
In at least some neighborhoods, the lower inventory appears to be pushing up prices, which should give hope to homeowners who are underwater, said Lisa Crosby-Torres, managing broker with the Danville office of Alain Pinel.
"As values rise some people may no longer be underwater," Crosby-Torres said.
Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.