The number of California homeowners entering the foreclosure process plunged during the first quarter of this year to the lowest level in more than seven years, according to statistics released by San Diego-based DataQuick.
During the first quarter, lenders recorded 18,567 notices of default (NODs) on California houses and condos. That was down 51.4% from 38,212 during the prior three months and down 67% from 56,258 in the first quarter of 2012. Last quarter's number was the lowest since 15,337 NODs were recorded in the fourth quarter of 2005.
The median price paid for a California home last quarter was $297,000, up 22.7% from a year ago. John Walsh, DataQuick's president, credits this as a driving force in bringing down foreclosure starts.
"Rising home prices will be key to the final mop-up of the foreclosure mess," Walsh says. "As values rise, fewer people owe more than their homes are worth, and more people can refinance into a more favorable loan. It also means more who fall on hard times can sell their homes for enough to pay off the loan."