More homes in Merced County reclaimed by banks

Merced County, mimicking a trend across California, saw a 15 percent increase in the number of homes reclaimed by banks last month.

On the flip side, there was a 9 percent decline in the number of local homes falling into foreclosure. Still, there are more homes falling into foreclosure than a year ago, according to figures released Thursday by ForeclosureRadar. The Bay Area firm collects and analyzes foreclosure data.

California saw a 22 percent increase from September to October in the number of homes returning to banks, reversing a three-month decline. There were 16,081 homes reclaimed by banks.

Though foreclosure activity remains high, the housing market is still suffering from low supplies.

Merced County has 519 homes up for sale, less than a two-month supply. One homeowner went to the City Council last month to complain all the homes she bid on were scooped up by investors.

Buyers are encouraged by the seemingly rock-bottom prices. Merced's median home price is $115,000. The federal government will continue nudging first-time buyers through a tax credit, worth up to $8,000. It was renewed and expanded by Congress and signed by President Barack Obama last week. It's set to expire April 30.

The National Association of Realtors announced Friday that first-time homebuyers accounted for 47 percent of the home sales, the highest it's been since the association began tracking buyer demographics in 1981.

The foreclosure problem continues to grind on, though homes are slow in hitting the market because banks remain reluctant to complete the proceedings, which have grown more lengthy and complex. There's also political pressure to not foreclose on homeowners.

Merced County saw 361 homes take the first step last month toward foreclosure. In September, 394 began proceedings. A year ago this time, that figure was at 221.

Homes slated to go to auction grew 17 percent to 459 in October.

Keys for 273 Merced County homes changed hands, up from 237 exchanges in September. Last October, 279 homes went back to banks.

Reporter Scott Jason can be reached at (209) 385-2453 or sjason@mercedsun-star.com.