Los Angeles Foreclosures Up 69 Pct. From Year Ago

Wednesday, January 7, 2009 4:39 PM

NEW YORK -- Fourth-quarter home foreclosures in both Los Angeles and Miami dipped from the previous quarter but rose versus a year ago, said real estate research firm PropertyShark.com, which warned the weak economy would spawn more foreclosures.

The number of newly scheduled auctions on foreclosed properties in Los Angeles county rose 69 percent to 11,232 compared with last year's fourth quarter. In Miami, they increased by 18 percent to 2,290 from a year ago.

"What we're looking at is people losing their jobs and that is why I think we've still got a long way to go. I don't think we're done with foreclosures," said PropertyShark.com Chief Executive Bill Staniford.

The decrease in foreclosures from the third quarter -- 29 percent in Los Angeles and 10 percent in Miami -- was attributed to seasonal factors, as the pace of government and business slowed around the November elections and the holidays.

Staniford considers the year-over-year increases more significant than the dip between quarters.

Speculation and risky lending fueled a housing boom between 2002 and 2006, followed by a bust as subprime borrowers began to default on their mortgages.

"The subprime hit has already come and to a large degree it's caused this momentum of a bad economy," Staniford said. "I think we've worked our way through the subprime crisis foreclosures. Now we're talking about economic malaise."

Foreclosures also rose year-over-year in New York City, which saw a 25 percent increase to 764 due mainly to a surge in the borough of Queens where subprime lending was most prevalent, Staniford said.

Seattle, however, was a bright spot. Its foreclosure numbers fell about 12 percent compared with the fourth quarter of 2007 to 318, a sign that its market is stabilizing.

While prices in Seattle may not rebound because tighter lending standards are making it hard for aspiring buyers to obtain mortgages, they will not fall further, Staniford predicted.

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