October 29, 2007

Getting Scary Out There

Foreclosures rose to their highest levels statewide in 20 years, and East Bay default levels were high, with 3,216 Contra Costa County households getting the dreaded default notices in their mailboxes in this year’s third quarter, a real estate information service reported Friday.

A default notice is the first step in the foreclosure process. Such notices were up 217.8 percent in Contra Costa County compared with the same period last year - a huge jump. In comparison, Alameda County saw a 164.8 percent increase, DataQuick reported.

CoCo County, as residents affectionately call it, is where Antioch, seemingly the foreclosure capital of the Bay Area, is located, and also has a lot of affordable housing and the kind of people who take out subprime loans, which is to say, poor people. These are the folks who are suffering and often defaulting as their adjustable-rate loan payments go up.

Alameda County has affluent Berkeley, Albany and Kensington, not to mention Oakland and Fremont, among other towns.

With these kinds of numbers, it’s unlikely CoCo County will be recovering anytime soon. This means long-suffering East Bay buyers can expect some great bargains, if you’re careful and do your homework. (See Sue Herz’ post on buying a foreclosed property. This is one of those things that often sounds better than it lives, as they say.)

Regardless, all these elements will contribute to lower home prices and opportunities for Bay Area buyers who have long struggled to break into the housing market. It’s that silver lining thing. Let’s hope the lenders show some mercy on their subprime clients and figure out how to avoid more foreclosures.