November foreclosures take a dip

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NEW YORK (CNNMoney.com) -- A new read on foreclosure filings showed a double-digit drop for November, but don't expect the slowdown to last.

According to RealtyTrac, an online marketer of foreclosed properties, filings fell 10 percent compared with October.

It was the first month-to-month, double-digit drop since April of 2006, although the total of 201,950 foreclosure filings - default notices, auction notices and bank repossessions - was still 68 percent higher than November of 2006.

"[The slowdown] could indicate that foreclosure activity has topped out for the year," James Saccacio, RealtyTrac's chief executive, said in a statement. "But," he added, "the true test of whether this ceiling will hold will come at the beginning of next year when we anticipate that a seasonal surge in foreclosure filings and another possible wave of resetting mortgages could place further pressure on the housing market."

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Most housing market indicators have pointed negative for months. Home prices are falling and threaten to drop further through 2008. These trends could add to foreclosures because lower prices mean strapped home owners can't tap into home equity as easily. Cash-flow shortages can leave them vulnerable.

The states with the biggest foreclosure problems remain those from the Sun Belt, where high price appreciation during the boom years left many homes over-valued, and the Rust Belt, where collapsing industries have led to economic stagnation and job loss.

Nevada, Florida and Ohio continued to lead all other states in foreclosure rates. Nevada had one filing for every 152 households. The state, which has led the foreclosure lists for the past 11 months, recorded a 1 percent rise from October and a 167 percent leap from a year ago.

Florida moved into second place despite a 3 percent month-to-month drop. It recorded 212 percent more filings this November than last. Ohio foreclosures fell 6 percent in November, pushing it from second to third place. Foreclosures have still nearly doubled there compared with last November.

California, where the foreclosure rate was one for every 325 households had more total filings than any other state with 39,992. The numbers fell month-to-month by more than 20 percent but have risen 107 percent for the year.

The state with the biggest drop in November was New Mexico, where filings plummeted 46 percent compared with October. And they were only up 4 percent from last year. The biggest drop compared with last November was recorded by North Dakota, where the foreclosure rate fell by 29 percent.

Also recording large year-to-year declines were New Jersey (-17 percent), Texas (-15 percent) and Kansas (-15 percent)

Among metro areas, California cities claimed six of the top 10 spots for filings. Three medium-size cities in the state's Central Valley led the way. Stockton had the highest rate in the country - one for every 99 households - followed by Modesto (one for every 104) and Merced (one for every 106).

Those areas had seen major home price run-ups during the housing boom as house-hunters, shut out of home ownership by sky-high prices in the nearby San Francisco Bay area, flocked there to buy. Now home prices in those cities are in steep decline.

The mixed report could be a sign of at least a stabilization, but it's still too soon to start celebrating.

But "If the trend of flat or decreasing foreclosure activity we've seen over the past three months continues in the first quarter," Saccacio said, "it would certainly bode well for 2008."