Among the nation's 100 largest metropolitan areas, Stockton, Calif.; Detroit; and Riverside-San Bernardino, Calif., posted the highest third-quarter foreclosure rates, RealtyTrac said Wednesday. Stockton had one foreclosure filing for every 31 households; Detroit had one for every 33 households; and Riverside-San Bernardino had one for every 43 households. Riverside-San Bernardino also had the most foreclosure filings overall -- 31,661 -- followed by Los Angeles, Detroit and Atlanta.
Other cities with top foreclosure rates were Fort Lauderdale, Fla.; Las Vegas; Sacramento, Calif.; Cleveland; Miami; Bakersfield, Calif.; and Oakland, Calif.
The Stockton, Detroit and Riverside numbers are truly astonishing. They mean that nearly everyone in these areas knows someone who is in foreclosure. That can't help but undermine confidence in the housing market, and therefore produce greater expectations of future house price declines. My best guess is that house prices in these places will overshoot downward, so it is going to be a long time before we see a bottom.